Question
The Green Mountain Supply Company manufactures 3 final products F , G and H and one intermediate product, R . During a recent month, the
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. How much is the total joint cost (in $) of G and H?
2.How much joint cost (in $) will be allocated to G?
3.How much joint cost (in $) will be allocated to H?
4.What is the total production cost (in $) of F?
5.What is the total production cost (in $) of G?
6.What is the total production cost (in $) of H?
$15,000 1,000 units F F@$17 1,000 units G G@ $10 $5,000 R $12,000 2,000 units HH@ $20 $10,000 1,000 unitsStep by Step Solution
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