Use the following information for the next 4 questions.
A joint process has total costs of $1,200 and yields 50 units each of two main products and 10 units of by-product that can be sold for $2.50 each.
-Under the net realizable value approach to accounting for by-products, what is the per unit cost of a main product if the physical output method of allocating joint costs is used?
A) $12.00
B) $24.00
C) $11.75
D) $23.50

Question

Quizplus · Accepted Answer

The net realizable value of the by-product is $25 (10 units x $2.50). The total cost of the joint process is $1,200. The total number of units produced is 110 (50 units of each main product + 10 units of by-product). The per unit cost of a main product is $11.75 ($1,200 - $25) / 110 units.

Use the Following Information for the Next 4 Questions