The Takita 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.

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During $2020,$ the selling prices of the items and the total amounts sold were as follows:

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$x-70$ tons sold for $$2,000$ per ton

pods sold for income stateme ost allocation methods.

$Y-240$ tons sold for $$1,500$ per ton

$Z-380$ tons sold for $$1,000$ per ton

at the point of splitoff and th

The total joint manufacturing costs for the year were $$400,000.$ Takita spent an additional $$250,000$ 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: $x,130$ tons; $Y,60$ tons; Z$,20$ tons. There was no beginning or ending work in process.

The Takita 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 $2020,$ 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.

$($a$)$ Start with the NRV cost allocation method. Begin by computing the net realizable value for total production at the point of splitoff and the weighting for each product. $($Enter the weights to two decimal places.$)$

Net realizable value of total production at splitoff

Weighting

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$\backslash$table$[[$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.$]]$

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$x-70$ tons sold for $$2,000$ per ton

$Y-240$ tons sold for $$1,500$ per ton

$Z-380$ tons sold for $$1,000$ per ton

The total joint manufacturing costs for the year were $$400,000.$ Takita spent an additional $$250,000$ 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: $x,130$ tons, $Y,60$ tons; $Z,20$ tons. There was no beginning or ending work in process.

Requirements

Compute the cost of inventories of $x,Y,$ and $Z$ for balance sheet purposes and the cost of goods sold for income statement purposes as of December $31,2020,$ using the following joint$-$cost$-$allocation methods:

a$.$ NRV method

b$.$ Constant gross$-$margin percentage NRV method

Compare the gross$-$margin percentages for $x,Y,$ and $Z$ using the two methods given in requirement $1.$