Webster Company produces 35,000 units of product A, 30,000 units of product B, a

Question

Webster Company produces 35,000 units of product A, 30,000 units of product B, and 19,000 units of product C from the same manufacturing process at a cost of $430,000. A and B are joint products, and C is regarded as a by-product. The unit selling prices of the products are $40 for A, $20 for B, and $1 for C. None of the products require separable processing. Of the units produced, Webster Company sells 28,000 units of A, 29,000 units of B, and 19,000 units of C. The firm uses the net realizable value method to allocate joint costs and by-product costs. Assume no beginning inventory. (Do not round intermediate calculations.) Required: 1. What is the value of the ending inventory of product A? Ending inventory 2. What is the value of the ending inventory of product B? Ending inventory

Explanation / Answer

Particulars amount joint costs 430,000 Sales of C units (19000*1) -19000 Net joint cost to be allocated between 411,000 A B total No of units obtained 35,000 30,000 units selling price 40 20 Sales value 1400000 600000 2000000 Allocation of joint costs (411000/2000000)*sales value 287700 123300 Joint cost per unit = allocated cost/units 8.22 4.11 Ending inventory in units 7000 1,000 ending inventory in amount 57540 4,110 answer 1) ending invenetory A = 57,540 2) ending inventory B   = 4,110

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.