Great Falls Company makes two products, Wool Gloves and Wool Mittens. They are initially processed from the same raw material and then, after split-off, further processed separately. Additional information is as follows:

\begin{array} { l r r r r } & \text { Gloves } & \text { Mittens } & \text { Total } \\\text { Final Sales Price } & \$ 9,000 & \$ 6,000 & \$ 15,000 \\\text { Joint Costs Prior to Split-Off Point } & ? & ? & \$ 6,600 \\\text { Costs Beyond Split-Off Point } & \$ 3,000 & \$ 3,000 & \$ 6,000\end{array}

What are the joint costs allocated to Gloves and Mittens assuming Great Falls uses the estimated net realizable value approach?

\begin{array} { l r r } & \text { Gloves } & \text { Mittens } \\\end{array}

\begin{array} { l r r } & \$ 3,300 & \$ 3,300 \\\end{array}

\begin{array} { l r r } & \$ 3,960 & \$ 2,640 \\\end{array}

\begin{array} { l r r } & \$ 4,400 & \$ 2,200 \\\end{array}

\begin{array} { l r r } & \$ 4,560 & \$ 2,040\end{array}

A) Option A
B) Option B
C) Option C
D) Option D

There Are Several Methods for Allocating Service Department Costs to Production

Multiple Choice

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