Net Realizable Value of Joint Products—Multiple Choice: Miller Manufacturing Company buys zeon for $.80 a gallon. At the end of distilling in department 1, zeon splits off into three products: argon, xon and neon. Argon is sold at the split-off point, with no further processing; xon and neon require further processing before they can be sold. Xon is used in department 2, and neon is solidified in department 3. Following is a summary of costs and other related data for the year ended December 31.

There were no beginning inventories on hand at January 1, and there was no zeon on hand at the end of the year on December 31. All gallons on hand on December 31 were complete as to processing. Miller uses the net realizable value method of allocating joint costs.

Required:

a. For allocating joint costs, the net realizable value of argon for the year ended December 31 would be:

(1) $30,000. (2) $45,000. (3) $21,000. (4) $6,000.

b. The joint costs for the year ended December 31 to be allocated are:

(1) $300,000. (2) $95,000. (3) $120,000. (4) $96,000.

c. The cost of xon sold for the year ended December 31 is:

(1) $90,000. (2) $66,000. (3) $88.857. (4) $96.000.

d. The value of the ending inventory for argon is:

(1) $24,000. (2) $12.000. (3) $8,000. (4) $13,333.

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Department Distilling Fusing Solidifying Cost of zeon Direct labor Manufacturing overhead $96,000 14,000 $45,000 $65,000 10,000 21,000 49,000 Products Argon Xon Neon Gallons sold 20,000 30,000 45,000 Gallons on hand at Year end 10,000 15,000 Sales in dollars $30,000 $96,000 $141,750