Net realizable value method. Convad Company is one of the world’s leading corn refiners. It produces two joint products, corn syrup and corn starch, using a common production process.

In July 2009, Convad reported the following production and selling price information:

REQUIRED Allocate the $325,000 joint costs using the NRV method.LO1

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Joint costs (costs of processing corn to splitoff point) Separable cost of processing beyond splitoff point Corn Syrup Corn Starch Joint Costs $325,000 $375,000 $93,750 Beginning inventory (cases) 0 0 Production and sales (cases) 12,500 6,250 Ending inventory (cases) 0 0 Selling price per case $50 $25