Mercury Corporation Allocates Joint Costs by Using the Net-Realizable-Value Method

question 35

Essay

Mercury Corporation allocates joint costs by using the net-realizable-value method. In the company's Michigan plant, products D and E emerge from a joint process that costs $250,000. E is then processed at a cost of $220,000 into products F and
A. Allocate the $220,000 processing cost between products F and
B. From a profitability perspective, should product E be processed into products F and G? Show your calculations.
C. Assume that the net realizable value associated with E is zero. How would you allocate the joint cost of $250,000?
G.
G. Data pertaining to D, F, and G follow. $\begin{array}{lrrr}&D&E&G\\\text { Costs beyond split-off } & \$ 50,000 & \$ 27,000 & \$ 25,000 \\\text { Selling price } & 40 & 38 & 50 \\\text { Pounds produced } & 10,000 & 4,000 & 2,000\end{array}$ Required: