Joint Costing problem: O’Mally Corporation makes different types of fertilizers and uses a joint process that...

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Joint Costing problem: O’Mally Corporation makes different types of fertilizers and uses a joint process that...

Joint Costing problem: O’Mally Corporation makes different types of fertilizers and uses a joint process that costs $16,000 for inputs and processing each batch of chemicals. Processing one batch results in the following joint outputs:

	Quantity	Sales price	Further processing	Sales price after
Product	in liters	at split off	costs	further processing
X	1,000,000	.09 per liter	30,000	.11 per liter
Y	500,000	.05 per liter	20,000	.10 per liter

a. What is the NRV for each of the products under either scenario? (Sell or process further)

business accounting

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Answer 1

Answer #1

	Quantity	Sales price	NRV at Split off	Further processing	Sales price after	NRV after Further processing
Product	in liters	at split off		costs	further processing
X	1,000,000	.09 per liter	1,000,000 x 0.09 = 90,000	30,000	.11 per liter	1,000,000 x 0.11 = 110,000
Y	500,000	.05 per liter	500,000 x 0.05 = 25,000	20,000	.10 per liter	500,000 x 0.10 = 50,000

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Answer 2

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