Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 9

Joint Products, Inc., produces two joint products, X and V, using a common input. These are produced in batches. The common input costs $8,000 per batch. To produce the final products (X and V), additional processing costs beyond the split-off point must be incurred. There are no beginning inventories. The accompanying data summarize the operations.
Required:
a. Compute the full cost of the ending inventory using net realizable value to allocate joint cost.
b. If the selling prices at the split-off point (before further processing) are $35 and $1 per pound of X and V, respectively, what should the firm do regarding further processing Show calculations.