Tango Company produces joint products M, N, and T from a joint process. This inf

Question

Tango Company produces joint products M, N, and T from a joint process. This information concerns a batch produced in April at a joint cost of $140,000

M

12,000

Required:

How much of the joint cost should be allocated to each joint product using the net realizable value method? (Enter your answers in whole dollars.)

Product             Allocated Joint Cost

M                     ___

N                      ___

T                      ___

Product Units Production and Sold Total Separable Costs Total Final Sales Value

M

12,000

$13,400 $180,000 N 6,000 10,000 160,000 T 7,000 5,200 29,000

Explanation / Answer

Joint Cost allocated to product M,N and T is calculated as under:

Under this method joint cost is allocated to products based on the net realizable value at

split-off point.

Net Realizable value is the estimated sale value of each product at the split-off point.

Particulars Product M Product N Product T Total Final Sales Value $180,000 $160,000 $29,000 $369,000 Less: additional proc. cost $13,400 10,000 5,200 $28,600 Net realizable value at Split-off point $166,600 $150,000 $23,800 $340,400 Proportionate Share $166,600/340,400 49% $150,000/340,000 44% $23,800/$340,400 7% Allocated Joint Cost $140,000*49% $68,600 $140,000*44% $61,600 $140,000*7% 9800

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