Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
228 views1 page

Chapter 6: Cost Allocation: Joint-Cost Situations: 1. Estimated Net Realizable Value Method

Milje-Sape AS produces cooking oil and soap oil from a single refining process. In July 2008, the joint costs were NKr 24 million. Separable costs were cooking oil NKr 30 million and soap oil NKr 7.5 million. They produced 1 million drums of cooking oil selling for NKr 50 per drum and 500,000 drums of soap oil selling for NKr 25 per drum. The task is to allocate the NKr 24 million in joint costs using the estimated net realizable value method.

Uploaded by

Shahid Naseem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
228 views1 page

Chapter 6: Cost Allocation: Joint-Cost Situations: 1. Estimated Net Realizable Value Method

Milje-Sape AS produces cooking oil and soap oil from a single refining process. In July 2008, the joint costs were NKr 24 million. Separable costs were cooking oil NKr 30 million and soap oil NKr 7.5 million. They produced 1 million drums of cooking oil selling for NKr 50 per drum and 500,000 drums of soap oil selling for NKr 25 per drum. The task is to allocate the NKr 24 million in joint costs using the estimated net realizable value method.

Uploaded by

Shahid Naseem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Chapter 6: Cost Allocation: Joint-Cost Situations

1. Estimated net realizable value method.


Milje-Sape AS produces two joint products, cooking oil and soap oil, from a
single vegetable oil refining process. In July 2008, the joint costs of this
process were NKr 24 000 000. Separable processing costs beyond the
split-off point were cooking oil, NKr 30 000 000; and soap oil NKr 7 500
000. Cooking oil sells for NKr 50 per drum. Soap oil sells for NKr 25 per
drum. Milje-Sape produced and sold 1 000 000 drums of cooking oil and
500 000 drums of soap oil. There are no beginning or ending stocks of
cooking oil or soap oil.

Task: Allocate the NKr 24 000 000 joint costs using the estimated NRV
method.
Fachbereich Elektrische
Energietechnik
2. Joint costs and by-products.
Prof. Dr. Valerie Wulfhorst
Pohjanmaan Oy processes an ore in Department 1, out of which come
three products L, W and X. Product L is processed further through Betriebswirtschaftslehre,
Department 2. Product W is sold without further processing. Product X is insb. Controlling
considered a by-product and is processed further through Department 3.
Costs in Department 1 are €800 000 in total; Department 2 costs are €100 Telefon
000; and Department 3 costs are €50 000. Processing 600 000 kg in 02921 378-451
Department 1 results in 50 000 kg of product L, 300 000 kg of product W Telefax
and 100 000 kg product X. 02921 378-409
E-Mail
Product L sells for €10 per kg. Product W sells for €2 per kg. Product X
[email protected]
sells for €3 per kg. The company wants to make a gross margin of 10% of
sales on product X and also 25% for marketing costs on product X.
Standort Soest
Tasks: Lübecker Ring 2
1. Calculate unit costs per kilogram for products L, W and X, treating X as 59494 Soest
a by-product. Use the estimated NRV method for allocating joint costs.
Deduct the estimated NRV the by-product produced from the joint costs
of products L and W.
2. Calculate unit costs per kilogram for products L, W and X, treating all
three as joint products and allocating costs by the estimated NRV
method.
Fachhochschule
Südwestfalen
Sitz: Iserlohn

Hagen
Iserlohn
Meschede
Soest

www.fh-swf.de

Page 1

You might also like