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Allocating Joint Costs Using the Net Realizable Value Method

A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,800. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:

Product		Gallons	Further Processing Cost per Gallon	Eventual Market Price per Gallon
L-Ten		3,000	$0.70	$2.50
Triol		3,500	1.00	4.60
Pioze		2,200	1.40	6.40

Required:

1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.

	Joint Cost
Grades	Allocation
L-Ten	$fill in the blank 1
Triol	fill in the blank 2
Pioze	fill in the blank 3
Total	$fill in the blank 4

2. What if it cost $2.00 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.

	Joint Cost
Grades	Allocation
L-Ten	$fill in the blank 5
Triol	fill in the blank 6
Pioze	fill in the blank 7
Total	$fill in the blank 8

Learning Objective 5 t Realizable Value Method \begin{tabular}{lccc} Product & Gallons & \begin{tabular}{c} Further Processing \\ Cost per Gallon \end{tabular} & \begin{tabular}{c} Eventual Market \\ Price per Gallon \end{tabular} \\ \hline L-Ten & 3,000 & $0.70 & $2.50 \\ Triol & 3,500 & 1.00 & 4.60 \\ Pioze & 2,200 & 1.40 & 6.40 \\ Required: & & & \end{tabular} \begin{tabular}{ll} & Joint Cost \\ Grades & Allocation \\ \hline L-Ten & \\ Triol & \\ Pioze & \\ & Total \end{tabular} \begin{tabular}{|c|c|} \hline Grades & \begin{tabular}{l} Joint Cost \\ Allocation \end{tabular} \\ \hline L-Ten & $ \\ \hline Triol & \\ \hline Pioze & \\ \hline Total & \\ \hline \end{tabular} Check My Work CPrevious Save and Exit Submit Assignment for Grading All work saved

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