The following information relates to a joint production process for three products, with a total joint production cost of $150,000. There are no separable processing costs for any of the three products.

Product Sales Value at Split-Off Units at Split-Off

1 $ 195,000 290

2 60,000 870

3 45,000 1,740 $

300,000 2,900

What amount of joint cost is allocated to each of the three products using the physical units method?

Answer: ProductAllocated Joint Cost1$15,0002$45,0003$90,000

Assume that the total sales value at the split-off point for product 1 is $90,000 instead of $195,000 and the sales value of product 3 is $3,000 instead of $45,000. Assume also that, because of its relatively low sales value, the firm treats product 3 as a by-product and uses the net realizable value method for accounting for joint costs. There are no separable processing costs for product 3. What amount of joint cost would be allocated to the three products? REQUIRED: ALLOCATION JOINT COST FOR PRODUCT:

1: $

2: $

3: $3,000