Question
Marin Products produces three products DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further.
Marin Products produces three products DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Marin's production, sales, and costs follows.
| DBB-1 | DBB-2 | DBB-3 | Total | |||||||||
| Units Sold | 16,000 | 24,000 | 36,000 | 76,000 | ||||||||
| Price (after addtl processing) | $ | 65 | $ | 50 | $ | 75 | ||||||
| Separable Processing cost | $ | 110,000 | $ | 44,000 | $ | 66,000 | $ | 220,000 | ||||
| Units Produced | 16,000 | 24,000 | 36,000 | 76,000 | ||||||||
| Total Joint Cost | $ | 3,600,000 | ||||||||||
| Sales Price at Split-off | $ | 25 | $ | 35 | $ | 55 | ||||||
The amount of joint costs allocated to product DBB-1 using the net realizable value method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):
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Auditors Letter Handbook
Authors: American Bar Association Business Law Section
2nd Edition
161438973X, 978-1614389736
