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A chemical plant produces three joint products: Product A; Product B; Product C. Joint production occurs in batches. A typical batch results in: 10,000 gallons
A chemical plant produces three joint products: Product A; Product B; Product C. Joint production occurs in batches. A typical batch results in: 10,000 gallons of Product A: 4.000 gallons of Product B; and 2,000 gallons of Product C. Joint costs are $320,000 per batch. Sales price per gallon (after further processing): $80 Product A $40 Product B $20 Product C All products must be further processed before they can be sold. Further processing costs (separable costs) per gallon are: $70 Product A $30 Product B $10 Product C Required Allocate joint costs (per batch) of $320,000 to the three Products. Use the net realizable value method
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