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Winchester Chemicals uses a joint process to produce VX-4, a chemical used in manufacturing of paints and varnishes; HD-10, a chemical used in household cleaning
Winchester Chemicals uses a joint process to produce VX-4, a chemical used in manufacturing of paints and varnishes; HD-10, a chemical used in household cleaning products; and FT-5, a by-product that is sold to fertilizer manufacturers. Joint production costs are allocated to the main products on the basis of net realized value. The by-product is inventoried at its net realizable value, and this value is used to refuce the joint production cost before allocation to the main products. During the month of November, Winchester incurred joint production costs of $1.568,000. Data regarding Winchesters November operations are as follows:
November production in gallons. $600,000 VX-4 $320,000 HD-10, 85,000 FT-5
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