M2Q10

Net Realizable Value Method, Decision to Sell at Split-off or Process Further Arvin, Inc., produces two products, ins and outs, in a single process. The joint costs of this process were $50,000, and 13,000 units of ins and 37,000 units of outs were produced. Separable processing costs beyond the split-off point were as follows: ins, $94,000; outs, $465,000. Ins sel for $8.00 per unit; outs sell for $15.00 per unit. Required: 1. Allocate the $50,000 joint costs using the estimated net realizable value method. 2. Suppose that ins could be sold at the split-off point for 57.00 per unit. Should Arvin sell ins at split-off or process them further? Ins be processed further as there will be s proft if sold at spilt-off