Question
Lalith Company produces four products from a joint process costing $ 480,000 per month. After leaving the joint process, the products must be further refined
Lalith Company produces four products from a joint process costing $ 480,000 per month. After leaving the joint process, the products must be further refined before they are salable. You have been provided with the following information:
Product Volume Separable costs Selling Price per Unit
X1 60,000 units $ 12 per unit $ 40
X2 50,000 units $ 15 per unit $ 50
X3 30,000 units $ 14 per unit $ 60
X4 20,000 units $ 13 per unit $ 80
(1) How much of the joint costs per batch will be allocated to X1, X2, X3 & X4 assuming that joint costs are allocated based on the number of units at split-off point?
(2) If joint costs are allocated on an NRV basis, how much of the joint costs will be allocated to X1, X2, X3 & X4?
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