Question

Part A:

Marin Products 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 Marin's production, sales, and costs follows.

	DBB-1			DBB-2			DBB-3			Total
Units Sold		14,000			22,000			30,000			66,000
Price (after addt’l processing)	$	85		$	70		$	95
Separable Processing cost	$	303,000		$	123,000		$	181,000		$	607,000
Units Produced		14,000			22,000			30,000			66,000
Total Joint Cost										$	4,100,000
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 (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar):

• $2,200,470.

• $501,190.

• $1,168,090.

• $731,440.

• $869,610.

Part B

Garrison Co. produces three products — X, Y, and Z — 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. Last year all three products were processed beyond split-off. Joint production costs for the year were $158,000. Sales values and costs needed to evaluate Garrison's production policy follow.

	Units		Sales Value at			If Processed Further
Product	Produced		Split Off			Sales Value			Additional Costs
x	10,000		$	49,500		$	127,500		$	10,700
y	5,000			43,500			68,500			22,000
z	10,000			54,000			68,000			30,000

The amount of joint costs allocated to product Z using the net realizable value method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

• $36,498.

• $24,898.

• $91,676.

• $29,826.

• $110,912.

Answer 1

Part - A

Answer - A- 2,200,470

	DBB-1	DBB-2	DBB-3	TOTAL
1) Units sold	14000	22000	30000	66000
2) Price(after add processing)	85	70	95
3) Total sales (1*2)	1190000	1540000	2850000	5580000
4) separable processing cost	303000	123000	181000	607000
5) net realizable value (3-5)	887000	1417000	2669000	4973000

joint costs allocation to DBB-3

=4100000*2669000/4973000

=2200470

part-B

Answer D - $ 29,826

total sales =264000

total additional costs =62700

total net realizable value = 201300

total net realizable value for product z

=68000-30000

=38000

joint costs allocated to product Z

=158000*38000/201300

=29826