The Moody Company produced three joint products at a joint cost of $117,000. Two

Question

The Moody Company produced three joint products at a joint cost of $117,000. Two of these products were processed further. Production and sales were:

  

  

Assume Q is a by-product and Moody uses the cost reduction method of accounting for by-product cost. If estimated net realizable value is used, how much of the joint costs would be allocated to product R? (Round your final answer to the nearest whole dollar.)

Weight Sales Addt'l. Processing Costs   P 317,000 lbs. $ 262,000 $ 217,000   Q 108,500 lbs. 34,250 0   R 108,500 lbs. 200,500 117,000

Explanation / Answer

Answer:

[($200500 - 117,000)/($45,000 + 83500)] x ($117,000-34250)

=(83500/128500)*82750=$53771.40

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