Question

Davenport Company buys Alpha-11 for $6 a gallon. At the end of distilling in Department A, Alpha-11 splits off into three products: Beta-1, Beta-2, and Beta-3. Davenport sells Beta-1 at the split-off point, with no further processing; it processes Beta-2 and Beta-3 further before they can be sold. Beta-2 is fused in Department B, and Beta-3 is solidified in Department C. Following is a summary of costs and other related data for the year ended November 30.

Department	(1) Distilling			(2) Fusing			(3) Solidifying
Cost of Alpha-11	$	718,000			0			0
Direct labor		172,000		$	338,000		$	494,000
Manufacturing overhead		150,000			161,000			401,000

Products	Beta-1			Beta-2			Beta-3
Gallons sold		184,000			368,000			552,000
Gallons on hand at year-end		124,000			0			183,000
Sales	$	644,000		$	2,208,000		$	3,312,000

Davenport had no beginning inventories on hand at December 1 and no Alpha-11 on hand at the end of the year on November 30. All gallons on hand on November 30 were complete as to processing. Davenport uses the net realizable value method to allocate joint costs.

Required:

Compute the following:

a. The net realizable value of Beta-1 for the year ended November 30.

net realizable value of beta-1

b. The joint costs for the year ended November 30 to be allocated.

joint costs

c. The cost of Beta-2 sold for the year ended November 30. (Do not round intermediate calculations.)

cost of beta-2 sold

d. The value of the ending inventory for Beta-1. (Do not round intermediate calculations.)

ending inventory for beta-1

Answer 1

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