The Green Mountain Supply Company manufactures 3 final products F, G and H and one intermediate product, R. During a recent month, the joint cost of producing 1,000 units of F and 2,000 units of R was $15,000. Product R was processed further into 1,000 units of G and 1,000 units of H at a cost of $12,000. Additional costs to complete G and H were $5,000 and $10,000, respectively. The unit selling prices of F, G and H are $17, $10 and $20 respectively.

Determine the total production cost of each final product when joint costs are allocated on the basis of relative net realizable value (NRV).

1. Analyzing the 2nd split-off point, what is the net realizable value (in $) of G?

2.What is the net realizable value (in $) of H?

3.Evaluating now the 1st split-off point, what is the net realizable value (in $) of F?

4.What is the net realizable value (in $) of the intermediate product, R (i.e. the joint product of G and H)?

5.How much joint cost (in $) will be allocated to F?