Arnold Company Processes Raw Material in Department 1 from Which

question 53

Essay

Arnold Company processes raw material in Department 1 from which come two main products,A and B,and a by-product,
C.A is further processed in Department 2,B in Department 3,and C in Department 4.The value of the by-product reduces the cost of the main products,and sales value is used to allocate joint costs.

	Dept 1	Dept 2	Dept 3	Dept 4
Cost Incurred:	$90,000	$10,000	$8,000	$10,000
Production:
A	10,000 lbs.
B	20,000 lbs.
C	10,000 lbs.
Selling Price:
A	$10/lb.
B	$5/lb.
C	$2/lb.

Required:
a. Commute unit costs for A and B Commute unit costs for A and B
b. Ending inventoty consists of 5,000 lbs. of B and 1,000 lbs. of C. What is the value of the inventoty?
Ending inventoty consists of 5,000 lbs. of B and 1,000 lbs. of C. What is the value of the inventoty?
c. Recompute a and b allocating cost based on net realizable value
Recompute a and b allocating cost based on net realizable value

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