Question 2

Miller Manufacturing Company buys Zeon for $0.80 a gallon. At the end of processing in department 1, Zeon splits off into products A, B, and C. product A is sold at the split-off point with no further processing. Products B and C require further processing before they can be sold; product B is processed in department 2 and product C is processed in department 3. Following is a summary of costs and other related data for the year ended October 31, 2021:

Department
	1	2	3
Cost of Zeon	$96,000	$0	$0
Direct labor	14,000	45,000	65,000
Manufacturing overhead	10,000	21,000	49,000

Products
	A	B	C
Gallons sold	20,000	30,000	45,000
Gallons on hand at Oct. 31	10,000	0	15,000
Sales	$30,000	$96,000	$141,750

There were no inventories on hand on November 1, 2020, and there was no Zeon on hand on October 31, 2021. All gallons on hand on October 31, 2021 were complete as to processing. There were no manufacturing overhead variances. Miller uses the net realizable value method of allocating joint costs.

Required:

Determine (showing all computations)

1. Net realizable value of product A
2. Joint costs
3. Cost of product B sold for the year ended October 31, 2021.
4. Ending inventory of product A.