Butterfly Corp. manufactures products M1 and M2 from a joint process, which also

Question

Butterfly Corp. manufactures products M1 and M2 from a joint process, which also yields a by-product, B1. Butterfly accounts for the revenues from its by-product sales as other income Additional information follows: M1 M2 B1 Total Units produced Allocated joint costs Sales value at split-off 51,100 ?S360,000 384,000 $256,000 $91,000 $731,000 Required Assuming that joint product costs are allocated using the net realizable value at split-off approach, what was the joint cost allocated to product M1? (Do not round intermediate calculations.) Joint cost ofproduct MI

Explanation / Answer

Allocation of Joint cost :- Joint cost          360,000 Sales at split off          731,000 M1 sales is          384,000 Cost allocation =(360000/731000)*384000 Cost allocation = $ 189,111 /- Joint cost for M1 is $ 189,111 /-

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