Use the following to answer questions:
Glenwilliams Lumber Company manufactures 3 products: Poplar, Birch, and Pine from a joint process. Joint-process costs in 2007 were $3,000,000. Additional information regarding the three products is as follows:

-Assuming that joint-product costs are allocated using the net-realizable-value method, what were the total costs of Birch?
A) $10,545,455
B) $ 511,500
C) $10,511,500
D) $10,000,000

Question

Use the following to answer questions:
Glenwilliams Lumber Company manufactures 3 products: Poplar, Birch, and Pine from a joint process. Joint-process costs in 2007 were $3,000,000. Additional information regarding the three products is as follows:
 
-Assuming that joint-product costs are allocated using the net-realizable-value method, what were the total costs of Birch?
A) $10,545,455 
B) $ 511,500 
C) $10,511,500 
D) $10,000,000

Quizplus · Accepted Answer

The net-realizable-value method of allocating joint-product costs involves assigning costs based on the final market value of the products minus any additional costs that will be incurred after the split-off point. The total costs of Birch, as indicated by choice C, suggest that it includes both the initial joint costs and any additional processing costs specific to Birch, aligning with the methodology of the net-realizable-value approach.

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