Herbster manufactures A, B, and C, all of which are joint products, and D, which

Q: Herbster manufactures A, B, and C, all of which are joint products, and D, which

Answer is :Decrease $450,000 by the net realizable value of D and then allocate the total among A, B, and C Option D is correct answer. Explanation : The estimated NRV method allocates joint costs to joint products on the basis of the relative estimated NRV. NRV = (expected final sales value in the ordinary course of business)

ID: 2379080 • Letter: H

Question

Herbster manufactures A, B, and C, all of which are joint products, and D, which is classified as a by-product. If joint manufacturing costs amount to $450,000 and the company is using a popular accounting method, the firm will:

allocate $450,000 among A, B, and C.

allocate $450,000 among A, B, C, and D.

increase $450,000 by the net realizable value of D and then allocate the total among A, B, and C.

decrease $450,000 by the net realizable value of D and then allocate the total among A, B, and C.

Explanation / Answer

Answer is :Decrease $450,000 by the net realizable value of D and then allocate the total among A, B, and C

Option D is correct answer.

Explanation :

The estimated NRV method allocates joint costs to joint products on the basis of the relative estimated NRV.

NRV = (expected final sales value in the ordinary course of business)

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Herbster manufactures A, B, and C, all of which are joint products, and D, which

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