Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows. DBB-1DBB-2DBB-3TotalUnits Sold18,80028,20040,20087,200Price (after additional processing)$ 65$ 50$ 75 Separable Processing cost$ 129,250$ 51,700$ 73,700$ 254,650Units Produced18,80028,20040,20087,200Total Joint Cost $ 4,160,000Sales Price at Split-off$ 25$ 35$ 55 The amount of joint costs allocated to product DBB-3 using the net realizable value method is:

Answered: Double Company produces three products…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 3CMA: Breegle Company produces three products (B-40, J-60, and H-102) from a single process. Breegle uses...

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Double Company produces three products — DBB-1, DBB-2, and DBB-3 from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Key information about Double's production, sales, and costs follows.

	DBB-1	DBB-2	DBB-3	Total
Units Sold	18,800	28,200	40,200	87,200
Price (after additional processing)	$ 65	$ 50	$ 75
Separable Processing cost	$ 129,250	$ 51,700	$ 73,700	$ 254,650
Units Produced	18,800	28,200	40,200	87,200
Total Joint Cost				$ 4,160,000
Sales Price at Split-off	$ 25	$ 35	$ 55

The amount of joint costs allocated to product DBB-3 using the net realizable value method is:

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In the net realizable value of allocating joint cost, we first compute the final selling price. Then we deduct the separable cost and compute the net realizable value at split-off point.

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