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Category > Accounting Posted 25 Sep 2017 My Price 7.00

Avignon Parfum Compagnie

(Approximated net realizable value method) Avignon Parfum Compagnie makes three products that can either be sold, or processed further and then sold. The cost associated with the Avignon joint process is $120,000.

   

Sales

Separate

Final
 

Units of

Prices at

Costs after

Sales

Product

Output

Split-Off

Split-Off

Price

Product 1

7,500

$3.00

$1.00

$4.25

Product 2

10,000

2.00

0.50

3.00

Product 3

12,500

2.00

0.75

3.00

Per unit, Product 1 weighs 3 ounces, Product 2 weighs 2 ounces, and Product 3 weighs 3 ounces. Assume that all additional processing is undertaken.

a. Allocate the joint cost based on the units of output, weight, and approximated net realizable values at split-off.

b. Assume all products are additionally processed and completed. At the end of the period, the inventories are as follows: Product 1, 500 units; Product 2, 1,000 units; Product 3, 1,500 units. Determine the values of the inventories based on answers obtained in part (a).

Answers

Maurice Tutor
(5)
Status NEW Posted 25 Sep 2017 10:09 PM My Price 7.00

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