Using the NRV method for allocating joint costs, specify how much joint cost will be allocated to the juice and to the puree/spaghetti sauce.

 

Kingbird & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Kingbird currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce $151,000 6.000 gallons $6 per gallon pounds 15.000 $19.000 $205.000