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Earl's Hurricane Lamp Oil Company produces both A-1 Fancy and B Grade Oil. There are approximately $18,000 in joint costs that Earl may allocate using
Earl's Hurricane Lamp Oil Company produces both A-1 Fancy and B Grade Oil. There are approximately $18,000 in joint costs that Earl may allocate using the relative sales value at splitoff or the net realizable value approach. At splitoff, A-1 sells for $20,000 while B grade selis for $40,000. After an additional investment of $10,000 after splitoff, $3,000 for B grade and $7,000 for A1, both the products sell for $50,000. What is the difference in allocated costs for the A-1 product assuming applications of the net realizable value and the sales value at splitoff approach? A-1 Fancy has $2,600 more joint costs allocated to it under the net realizable value approach than the sales value at splitoff approach. A-1 Fancy has $1,300 more joint costs allocated to it under the net realizable value approach than the sales value at splitoff approach. IA-1 Fancy has $2,600 less joint costs allocated to it under the net realizable value approach than the sales value at splitoff approach. A-1 Fancy has $1,500 less joint costs allocated to it under the net realizable value approach than the sales value at splitoff approsch
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