Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run incurs joint costs of $531,000 and results in 94,400 units of RBL and 141,600 units of CBL. Each RBL sells for $10 per unit and each CBL sells for $12 per unit. Required: 1. Assuming that no further processing occurs after the split-off point, how much of the joint costs are allocated to commercial lumber (CBL) on a physical measure method basis? 2. If no further processing occurs after the split-off point, how much of the joint cost is allocated to the residential lumber (RBL) using a sales value at split-off method? 3. Assume that the CBL is not marketable at split-off but must be planed and sized at a cost of $354,000 per production run. During this process, 11,800 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $236,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? 4. Based on information in requirement 3, should NBP choose to process RBL beyond split-off? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Answer is not complete. Required 3 Completion costs Required 4 split-off but must be planed sized at a cost Assume that the CBL is not marketable 54,000 per production run. During this process, 11,800 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $236,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? (Do not round intermediate calculations. Round your final answer to 4 decimal places.) Show less A
Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run incurs joint costs of $531,000 and results in 94,400 units of RBL and 141,600 units of CBL. Each RBL sells for $10 per unit and each CBL sells for $12 per unit. Required: 1. Assuming that no further processing occurs after the split-off point, how much of the joint costs are allocated to commercial lumber (CBL) on a physical measure method basis? 2. If no further processing occurs after the split-off point, how much of the joint cost is allocated to the residential lumber (RBL) using a sales value at split-off method? 3. Assume that the CBL is not marketable at split-off but must be planed and sized at a cost of $354,000 per production run. During this process, 11,800 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $236,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? 4. Based on information in requirement 3, should NBP choose to process RBL beyond split-off? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Answer is not complete. Required 3 Completion costs Required 4 split-off but must be planed sized at a cost Assume that the CBL is not marketable 54,000 per production run. During this process, 11,800 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $236,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? (Do not round intermediate calculations. Round your final answer to 4 decimal places.) Show less A
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...
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Step 1: Joint cost and allocation of joint cost
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VIEWStep 3: Allocation of joint cost on the basis of Sales value at split off method
VIEWStep 4: Allocation of joint cost on the basis of net realizable value basis
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