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The Bounceback Manufacturing Company manufactures two products, Realrubber and Fakerubber, from the same material. The material costs $0.95 per pound and must pass through two
The Bounceback Manufacturing Company manufactures two products, Realrubber and Fakerubber, from the same material. The material costs $0.95 per pound and must pass through two departments. In Department 1, the material is split into Realrubber and Fakerubber. Realrubber requires no further processing; Fakerubber must be processed further in department 2. The costs below pertain to the year ended Decmber 31, 19X8. Factor Department Direct Director Labor Overhead Total Materials $144,000 $21,000 $15,000 $180 2 10,000 18,000 28,000 Totals $144,000 $31,000 $33,000 $208,000 1 Product Realrubber Fakerubber Pounds of Finished Goods Pounds Sold Ending Inventory 30,000 15,000 45,000 Sales $52,500 150,750 They were no materials on hand at year end. Required a. Compute the allocation of joint costs between Realrubber and Fakerubber. b. Compute using market value method C. Compute using the output method
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