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Required information Problem 17-31 Joint Products; Sell or Process Further (LO 17-4, 17-5) (The following information applies to the questions displayed below.) Winchester Chemicals uses a joint process to produce VX-4, a chemical used in the manufacture of paints and varnishes; HD-10, a chemical used in household cleaning products; and FT-5, a by-product that is sold to fertilizer manufacturers. Joint production costs are allocated to the main products on the basis of net realizable value. The by-product is inventoried at its net realizable value, and this value is used to reduce the joint production cost before allocation to the main products. During the month of November, Winchester incurred joint production costs of $4,383,000. Data regarding Winchester's November operations are as follows: November production in gallons Sales value per gallon at split-off Separable processing cost Final sales value per gallon Finished-goods inventory in gallons on November 30 (all produced during November) VX-4 700,000 None $1,740,000 $ 10.00 HD-10 370,000 $ 7.00 $2,240,000 $ 15.25 FT-5 95,000 $ 2.80* None None 10,000 31,000 2,500 *Disposal costs of $0.20 per gallon will be incurred in order to sell the by-product Problem 17-31 Part 2 2. Determine the dollar values of Winchester Chemicals' finished-goods inventories on November 30 for VX-4 and HD-10. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Inventory Values VX-4 HD-10

Answer 1

Answer
Joint production cost	$           4,383,000
less:net realizable value from sale of byproduct [95000(2.8-.20)]	-$              247,000
Remaining joint cost to be allocated	$           4,136,000
	VX-4	HD-10	Total
sales value	$70,00,000 (700000*10)	$ 5,642,500      (370000*15.25)
less:separable cost	-1740000	-2240000
Net realizable value	5260000	3,402,500	8,662,500
Allocation of joint cost	4136000*526000/8662500	4136000*3402500/8662500	`
	$      2,511,441.27	$   1,624,558.73
	VX4	HD -10
Separable cost	$           1,740,000	$        2,240,000
Joint cost	$      2,511,441.27	$   1,624,558.73
Total cost	$      4,251,441.27	$   3,864,558.73
units produced	700000	370000
unit cost	$                6.0735	$           10.4448
2)
	Inventory values
VX-4	1000*6.0735= $ 60735
HD-10	31000*10.4448= $ 323,788.8