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[Fact Pattern #3] A manufacturing company produces two main products and a by-product out of a joint process. Main Product-1 could be sold at split-off.
[Fact Pattern #3] A manufacturing company produces two main products and a by-product out of a joint process. Main Product-1 could be sold at split-off. Main Product-2 requires additional processing before it can be sold. The company employs the estimated net realizable sales value method to allocate the joint product costs. The net realizable value of the by-product is inventoried and used to reduce the joint product costs. Data regarding the two main products and the by-product for the current month are 1. Joint production costs of $75,000 were incurred in the current month for the quantities produced. 2. Distribution costs of $0.05 per gallon are incurred on the sale of the by-product. 3. Selling price of the by-product is $0.55 per gallon. 4. Production volume for the by-product is 10,000 gallons. 5. Net realizable sales value for Main Product-1 is $80,000. 6. Net realizable sales value for Main Product-2 is $320,000. h [21] (Refers to Fact Pattern 3 ) The joint product costs assigned to Main Product-1 for the current month are A. $13,900 B. $16,000 C. $14,000 D. $15,000
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