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Charlottetown Manufacturing Company manufactures three products from a joint process. The total joint cost incurred with these products is $50,000. Product 1 has no sales
Charlottetown Manufacturing Company manufactures three products from a joint process. The total joint cost incurred with these products is $50,000. Product 1 has no sales value at the split off point. However, if the company incurs additional processing costs of $10,000, they will have a product that can be sold for S25 per unit. Product 2 can be sold for $15 per unit at split off, but management prefers to process it further at a cost of S13,000, increasing the selling price of the final product to $70. Product 3 is usually sold at split off for $80 per unit. For the year, 3,500 output units were produced. Product I's production exceeded Product 2's by three hundred, while Product 3's production exceeded Product I's by two hundred. What is the amount of the joint cost that should be allocated to product 1 the company allocates joint costs using the net realizable value method with equal gross margins for each product (rounded to the nearest whole dollar)? (a) S 683. (b) 8,671. 13. , assuming (c) $16,667. (d) 6,667
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