The Keeva Company operates a simple chemical process to convert a single material into three separate items, referred to here as X, Y, and Z. All three end products are separated simultaneously at a single splitoff point. (Click the icon for additional information.) During 2017, the selling prices of the items and the total amounts sold were as follows: (Click the icon to view the sales information.) Read the requirements Requirement 1. Compute the cost of inventories of X, Y, and Z for balance sheet purposes and the cost of goods sold for income allocation methods. More Info (a) Start with the NRV cost allocation method. Begin by computing the net realizable value for total production at the point of splitof X Y Z Total X - 100 tons sold for $1,200 per ton Y - 280 tons sold for $900 per ton Z-540 tons sold for $600 per ton Net realizable value of total production at splitoff $ 480,000 S 360,000 $ 160,000 $1,000,000 0.48 0.36 0.16 1.00 Weighting Calculate the joint costs allocated to each of the three products and enter them into the table below. Next, enter the additional cost (Enter a "0" for any cells with a zero balance.) The total joint manufacturing costs for the year were $352,000. Keeva spent an additional $200,000 to finish product Z. There were no beginning inventories of X, Y, or Z. At the end of the year, the following inventories of completed units were on hand: X, 300 tons; Y, 120 tons; Z, 60 tons. There was no beginning or ending work in process NRV method: Y Z Total Joint costs allocated $ 168,960 $ 126,720 $ 56,320 $ 352.000 0 Additional costs to process 200,000 200,000 More Info Total productions costs 168,960 $ 126,720 256,320 $ 552,000 Determine the formula needed to compute the cost of goods sold using the NRV method. Total cost to produce Products X and Y are ready for sale immediately upon splitoff without further processing or any other additional costs. Product Z, however, is processed further before being sold. There is no available market price for Z at the splitoff point. The selling prices quoted here are expected to remain the same in the coming year. Units sold Units produced Cost of goods sold (NRV method) Compute the cost of goods sold for income statement purposes as of December 31, 2017, using the NRV cost allocation method. NRV method: Y Z Total Cost of goods sold 42.240 88,704 230,688 361,632 Print Done Determine the formula needed to compute the cost of ending inventory using the NRV method. Total cost to produce Units on hand Units produced Ending inventory (NRV method) Compute the cost of inventories of X, Y, and Z for balance sheet purposes as of December 31, 2017, using the NRV cost allocation More Info NRV method: Y Z Total Ending inventory $ 126,720 $ 38,016 $ 25,632 $ 190,368 (b) Compute the cost of inventories of X, Y, and Z for balance sheet purposes and the cost of goods sold for income statement pur X - 100 tons sold for $1,200 per ton Y - 280 tons sold for $900 per ton Z-540 tons sold for $600 per ton Keeva's constant gross-margin percentage for the period ending December 31, 2017 is 54 %. Determine the total costs to produce the products under the constant gross-margin percentage NRV cost allocation method. The total joint manufacturing costs for the year were $352,000. Keeva spent an additional $200,000 to finish product Z. There were no beginning inventories of X, Y, or Z. At the end of the year, the following inventories of completed units were on hand: X, 300 tons; Y, 120 tons; Z, 60 tons. There was no beginning or ending work in process X Y Z Total Constant GM percentage NRV method: Final sales value of total production $ 480,000 $ 360,000 $ 360,000 $ 1,200,000 Less: gross margin 259,200 194,400 194.400 648,000 Total production costs $ 220,800 $ 165,600 $ 165,600 $ 552,000 More Info Determine the formula needed to compute the cost of goods sold using the constant gross margin (GM) percentage NRV method. Constant GM% 2017 revenue 100% GM percentage ) = Cost of goods sold Products X and Y are ready for sale immediately upon splitoff without further processing or any other additional costs. Product Z, however, is processed fur before being sold. There no available market price for Z at the splitoff point. selling prices quoted here are expected to remain the same in the coming yea Compute the cost of goods sold for income statement purposes as of December 31, 2017, using the constant gross-margin percentage N X Y Z Total Constant GM percentage NRV method: Cost of goods sold 55,200 115,920 149,040 320,160 Print Done Determine the formula needed to compute the ending inventory using the constant gross-margin percentage NRV method. Total cost to produce Cost of goods sold - Ending inventory (Constant GM%) Compute the cost of inventories of X, Y, and Z for balance sheet purposes as of December 31, 2017, using the constant gross-margin percentage NRV cost allocation method. Compute the cost of goods sold for income statement purposes as of December 31, 2017, using the constant gross-margin percer Y Z Total Constant GM percentage NRV method: Cost of goods sold More Info 55,200 115,920 149,040 320,160 Determine the formula needed to compute the ending inventory using the constant gross- margin percentage NRV method. Total cost to produce Cost of goods sold Ending inventory (Constant GM%) Products X and Y are ready for sale immediately upon splitoff v processing or any other additional costs. Product Z, however, is before being sold. There is no available market price for Z at th selling prices quoted here are expected to remain the same in Compute the cost of inventories of X, Y, and Z for balance sheet purposes as of December 31, 2017, using the constant gross-margin pe Y Z Total Constant GM percentage NRV method: Ending inventory $ 165.600 $ 49,680 $ 16,560 $ 231,840 Requirement 2. Compare the gross-margin percentages for X, Y, and Z using the two methods given in requirement 1. (Round the gross Print Done Allocation method X Y Z NRV % % % Constant GM percentage NRV % % %