Algonquin Products Produces Two Products, X and Y, in a Single

question 35

Multiple Choice

Algonquin Products produces two products, X and Y, in a single process. In 2011, the joint costs of this process were $25,000. In addition, 4,000 units of X and 6,000 units of Y were produced. Separable processing costs beyond the split-off point were: X-$10,000; Y-$20,000. X sells for $10.00 per unit; Y sells for $7.50 per unit.
What amount of joint costs will be allocated to product X using the net realizable value net realizable value method?

• A)$11,765
• B)$40,000
• C)$39,000
• D)$13,636

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choice.

Car

A motor vehicle with wheels designed for transport, usually propelled by an internal combustion engine or an electric motor.

Truck

A vehicle engineered for the purpose of transporting goods or cargo.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing between two or more options.