Question
Great Falls Company makes two products, Wool Gloves and Wool Mittens. They are initially processed from the same raw material and then, after split-off, further
Great Falls Company makes two products, Wool Gloves and Wool Mittens. They are initially processed from the same raw material and then, after split-off, further processed separately. Additional information is as follows:
| Gloves | Mittens | Total | |||||||
| Final Sales Price | $ | 14,400 | $ | 11,940 | $ | 26,340 | |||
| Joint Costs Prior to Split-Off Point | ? | ? | 15,066 | ||||||
| Costs Beyond Split-Off Point | $ | 4,800 | $ | 4,800 | $ | 9,600 | |||
What are the joint costs allocated to Gloves and Mittens assuming Great Falls uses the estimated net realizable value approach?
| Gloves | Mittens | ||||||
| A. | $ | 7,533 | $ | 7,533 | |||
| B. | $ | 8,200 | $ | 6,866 | |||
| C. | $ | 8,640 | $ | 6,426 | |||
| D. | $ | 8,800 | $ | 6,266 | |||
Option A
Option D
Option C
Option B
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Auditing An International Approach
Authors: Wally Smieliauskas, Amy Kwan, Kathleen Cogliano, Catherine Barrette
8th Canadian Edition
