NET REALIZABLE VALUE METHOD I've had 3 tutors answer the question incorrectly

do?invoker=assignments&takeAssignmentSessionLocator=assignment-take&inprogress=false eBook Joint Cost Allocation-Net Realizable Value Method Nature's 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 20,400 cubic yards of wood chips, 10,400 cubic yards of mulch, and 9,200 cubic yards of wood pulp. The joint production process costs a total of $34,000 per batch. After the split-off point, wood chips are immediately sold for $25 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 $22 and $25 per cubic yard, respectively. The additional production process of the wood pulp costs $5 per cubic yard, after which it is sold for $30 per cubic yard. The additional production process of the mulch costs $4 per cubic yard, after which it is sold for $27 per cubic yard. Allocate the joint costs of production to each product using the net realizable value method. Joint Product Allocation Wood chips 17,665 X Wood pulp 9,006 X 7,329 X Mulch TA Totals 34,000 Feedback Check My Work The net realizable value method allocates joint costs using each product's estimated net realizable value after it is fully processed. Products that have a higher net realizable value are allocated more joint costs. Net realizable value is the estimated selling price of a product less any costs necessary to further process the product beyond the split-off point. Previous Next