Vreeland, Inc., manufactures products X, Y, and Z from a common process. Joint c

Question

Vreeland, Inc., manufactures products X, Y, and Z from a common process. Joint costs were $61,000. Additional information is as follows:

  

  

Assuming that joint product costs are allocated using the net realizable value method, what were the total costs assigned to Product Y?

If Processed Further Units Sales Value at Sales Additional Product Produced Split-off Value Costs   X 6,100 $ 41,000 $ 56,500 $ 4,100   Y 4,100 36,000 46,500 6,150   Z 2,100 26,000 31,500 8,100 12,300 $ 103,000 $ 134,500 $ 18,350

Explanation / Answer

Solution-

Total costs assigned to Product Y = $6,100+[($36,000/103,000)*$61,000]

Total costs assigned to Product Y = $27,420

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