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Joint Cost AllocationNet Realizable Value Method Lilys Lemonade Stand makes three types of lemonade: pure,...

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Accounting

Joint Cost AllocationNet Realizable Value Method

Lilys Lemonade Stand makes three types of lemonade: pure, raspberry, and strawberry. The lemonade is produced through a joint mixing process that costs a total of $30 per batch. One batch produces 32 cups of pure lemonade, 21 cups of strawberry lemonade, and 21 cups of raspberry lemonade. After the split-off point, all three lemonades can be sold for $0.80 per cup, but strawberry and raspberry lemonade can be processed further by adding artificial coloring and flavoring and sold for $0.95 and $1.00 per cup, respectively. It is estimated that these additional processing costs are $0.75 and $1.80 per batch for strawberry and raspberry lemonade, respectively.

Allocate the joint costs of production to each product using the net realizable value method.

Joint Product Allocation
Pure lemonade $fill in the blank 1
Strawberry lemonade fill in the blank 2
Raspberry lemonade fill in the blank 3
Totals $fill in the blank 4

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