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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 38
Estimated Net Realizable Value Method
Blasto, Inc., operates several mines. At one, a typical batch of ore run through the plant yields three products: lead, copper, and manganese. At the split-off point, the intermediate products cannot be sold without further processing. The lead from a typical batch sells for $160,000 after incurring additional processing costs of $48,000. The copper is sold for $320,000 after additional processing costs of $40,000, and the manganese yield sells for $240,000 but requires additional processing costs of $72,000. The joint costs of processing the raw ore, including the cost of mining, are $400,000 per batch.
Required
Use the estimated net realizable value method to allocate the joint processing costs.
Blasto, Inc., operates several mines. At one, a typical batch of ore run through the plant yields three products: lead, copper, and manganese. At the split-off point, the intermediate products cannot be sold without further processing. The lead from a typical batch sells for $160,000 after incurring additional processing costs of $48,000. The copper is sold for $320,000 after additional processing costs of $40,000, and the manganese yield sells for $240,000 but requires additional processing costs of $72,000. The joint costs of processing the raw ore, including the cost of mining, are $400,000 per batch.
Required
Use the estimated net realizable value method to allocate the joint processing costs.
Explanation
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Verified
Joint Cost is the cost incurred when 2 o...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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