Garden of Eden Company manufactures two products, Brights and Dulls, from a join

Question

Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. ? What is the amount of joint costs allocated to Brights using the net realizable value method? a. $-0- b. $50,000 c. $11,446 d. $11,906

Explanation / Answer

Calculate net realizable value :

Bright = (250-60)*250 = 47500

Dull = (200-40)*1000 = 160000

Total = 207500

Joint cost allocated to brights = 50000*47500/207500 = 11446

so answer ies c) $11446

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