Nelson Inc AAccount for All Costs Using a Physical Basis for Allocation

question 37

Essay

Nelson Inc.obtains two products and a by-product from its production process.By-product revenues are treated as other income and a noncost approach is used to assign costs to them.During the period,1,200 units were processed at a cost of $12,000 for materials and conversion costs,resulting in the following:
$$\begin{array} { c c c c r } & \text { Sales Value } & \text { Costs after } & \text { Final } \\\text { Praduct } & \text { Units } & \text { Separation } & \text { Separation } & \text { Value } \\\hline\mathbf { X } & 200 & \$ 4,000 & \$ 2,000 & \$ 10,000 \\\mathbf { Y } & 400 & 5,000 & 6,000 & 12,000 \\\text { By-praduct } & 150 & 500 & 500 & 1,500\end{array}$$
a.Account for all costs using a physical basis for allocation.
b.Account for all costs using net realizable value as the basis for allocation.
c.Account for all costs using final sales value as the basis for allocation.
d.How much joint costs should be allocated to the by-product?

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Definitions:

Cool Colors

Colors perceived as calming and soothing, often associated with shades of blue, green, and purple.

Appropriate Level

The suitable or recommended intensity or degree of a condition, activity, or measurement.

Cool And Warm

Terms used to describe the perceived temperature or tones, often in relation to colors, atmospheres, or physical sensations.

First Impression

The initial perception or judgment one makes about something or someone upon first encountering them, often lasting and difficult to change.