Question

Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run incurs joint costs of $470,000 and results in 110,000 units of RBL and 60,000 units of CBL. Each RBL sells for $10 per unit and each CBL sells for $14 per unit. Required: 1. Assuming that no further processing occurs after the split-off point, how much of the joint costs are allocated to commercial lumber (CBL) on a physical measure method basis? 2. If no further processing occurs after the split-off point, how much of the joint cost is allocated to the residential lumber (RBL) using a sales value at split-off method? 3. Assume that the CBL is not marketable at split-off but must be planed and sized at a cost of $330,000 per production run. During this process, 10,000 units are unavoidably lost and have no value. The remaining units of CBL are salable at $15 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $170,000 per production run. The RBL is then sold for $11 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? 4. Based on information in requirement 3, should NBP choose to process RBL beyond split-off? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below.

Partially correct. I appreciate your help.

Answer 1

Allocation Of Joint Cost on the basis of physical cricky Pasticulos ROL CRL Units produced 110,000 units Gooco write 7. Of production -35.3 170,000 Joint Cost Allocation $304,090 $ 165,910 $ 470,000) 110,000 179.000 - 64.7% 60,000

a Allocation of Joint Cost based on salevalue split-off Particulars PBL CBL Uniti 110.000 units 60.000 units Selling Price Perunit $10 $14 Sale value $1,100,000 $ 840,006 Point Cost- Allocation $ 266,495 6203,505 $1,100,000 1840,000 $1,940,000 $1940,000 x $170,000 $470,000 Х The vet realisable value cannot detes mind af split off. then additional Gels added aftes the split -off poine must subtracted from the final selling Price to alive neb sualizable value. CBL Sale value at split-off- Units Of CBC produced = 60,000 units (10,000 units) Units Available for Sale Sale value of Allailable units (50,000 units x $15) less: Spoliage 50.000 units $750,000 less processing Cost to Comylete = ( $950,00) $420,00 Sale value at Split - Off

RBL Sale value at split -off' Sale value C$ 110,000 units x $10) = $1,100,000 to ( The Additional procening Cast's incurred genrate higher eclling price of i !! Per unit is not relvent to the sale value of Split -off) Allocation of Joint costs to CBL- 94637 72.36 CBl at split-off $490000 RBC at Split-opp - $ 1,100,000 $ 1,520,000 100 / Total Sale value Cost per unit of CBL- Joint Cost $470.000 Additimal procencing Cost = $330,000 -Total Cost- = $800,000 No. of units sold 60,000 unity Cost Perunit $13.331- $800,000 60,000 4. On the basis of 3. RBC procen beyond split-off. is not possiable because of Revenue is ton than high lus than the total cost /additional Cost option :-c is Correct Please do like, Hopfy chugging