CostExercise16y

CostExercise16y - Ahmed Souary 16-20 Alternative methods of...

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Ahmed Souary 16-20 Alternative methods of joint-cost allocation, ending inventories. Total production for the year was: Ending Total Sold Inventories Production X 120 180 300 Y 340 60 400 Z 475 25 500 A diagram of the situation is in Solution Exhibit 16-20. 1. a. Net realizable value (NRV) method: X Y Z Total Final sales value of total production, 300 × \$1,500; 400 × \$1,000; 500 × \$700 \$450,000 \$400,000 \$350,000 \$1,200,000 Deduct separable costs –– –– 200,000 200,000 Net realizable value at splitoff point \$450,000 \$400,000 \$150,000 \$1,000,000 Weighting, \$450; \$400; \$150 o \$1,000 0.45 0.40 0.15 Joint costs allocated, 0.45, 0.40, 0.15 × \$400,000 \$180,000 \$160,000 \$ 60,000 \$ 400,000 Ending Inventory Percentages: X Y Z Ending inventory 180 60 25 Total production 300 400 500 Ending inventory percentage 60% 15% 5% Income Statement X Y Z Total Revenues, 120 × \$1,500; 340 × \$1,000; 475 × \$700 \$180,000 \$340,000 \$332,500 \$852,500 Cost of goods sold: Joint costs allocated 180,000 160,000

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This note was uploaded on 06/23/2011 for the course BUS 2B taught by Professor Hayle during the Spring '11 term at El Camino.

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CostExercise16y - Ahmed Souary 16-20 Alternative methods of...

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