Joint Cost AllocationNet Realizable Value Method

Natures Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,808 cubic yards of wood chips, 14,500 cubic yards of mulch, and 9,508 cubic yards of wood pulp. The joint production process costs a total of $30,000 per batch. After the split-off point, wood chips are immediately sold for $23 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $26 and $28 per cubic yard, respectively. The additional production process of the wood pulp costs $3 per cubic yard, after which it is sold for $34 per cubic yard. The additional production process of the mulch costs $2 per cubic yard, after which it is sold for $36 per cubic yard.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Open spreadsheet

Allocate the joint costs of production to each product using the net realizable value method. Do not round intermediate calculations. Round your answers to the nearest dollar.

Joint Product
Wood chips
Wood pulp
Mulch
Totals