Hi
⁉️
▪️The Company processes product (X) into two joint products, (A) and (B)
▪️Product (X) is purchased in 1300 gallon drums for $7,000 .
▪️Processing costs are $3,000 to process the 1300 gallons of product (X) into 1000 gallons of product (A) and 300 gallons of product(B) .
▪️The selling price is $10 per gallon for product (A) and $3 per gallon for product (B) .
▪️Product (A) can be processed further into 700 gallons of product (A.01) if $1,000 of additional processing costs are incurred.
▪️Product (A.01) can be sold for $20 per gallon.
✳️ If the net-realizable-value method were used to allocate costs to the joint products, 👉 what’s the total cost of producing product (A.01) ?
Txs
CAclubindia
