The Moody Company produced three joint products at a joint cost of $118,000. Two
ID: 2484412 • Letter: T
Question
The Moody Company produced three joint products at a joint cost of $118,000. Two of these products were processed further. Production and sales were: Weight Sales Addt'l. Processing Costs P 318,000 lbs. $ 263,000 $ 218,000 Q 109,000 lbs. 34,500 0 R 109,000 lbs. 202,000 118,000 Assume Q is a by-product and Moody uses the cost reduction method of accounting for by-product cost. If estimated net realizable value is used, how much of the joint costs would be allocated to product R? (Round your final answer to the nearest whole dollar.)
Explanation / Answer
joint costs That would be allocated to product R is $54,372.09 Statement showing computations Particulars Product P Product R Amount Sale Revenue 263,000.00 202,000.00 Less : Additional processing costs 218,000.00 118,000.00 Net Realisable Value 45,000.00 84,000.00 129,000.00 Allocation of Joint Costs = NRV of product/129,000 * (118,000 - 34,500) 29,127.91 54,372.09 83,500.00