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The Stanford Corporation produces three outputs: A, B and C from one input. The net-realizable-value of A at the split-off point is $200,000. The net-realizable-value of B at the split-off point is $400,000 and the net-realizable- value of C at the split-off is $50,000. Final sales values are $400,000, $600,000 and $50,000 for A, B and C respectively. However, these prices are subject to erratic change. The additional processing costs for A, B and C are $100,000, $150,000 and $0 respectively. Stanford produces 120,000 units of A, 120,000 units of B and 60,000 units of C. The total costs incurred up to the split-off point are $300,000
-If the net-realizable-value method is used and product C is accounted for as reduction of joint costs, what amount of joint- costs should be allocated to product B?
A) $100,000
B) $118,750
C) $150,000
D) $168,750

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The Answer of Use the following to answer questions:
The Stanford Corporation produces three outputs: A, B and C from one input. The net-realizable-value of A at the split-off point is $200,000. The net-realizable-value of B at the split-off point is $400,000 and the net-realizable- value of C at the split-off is $50,000. Final sales values are $400,000, $600,000 and $50,000 for A, B and C respectively. However, these prices are subject to erratic change. The additional processing costs for A, B and C are $100,000, $150,000 and $0 respectively. Stanford produces 120,000 units of A, 120,000 units of B and 60,000 units of C. The total costs incurred up to the split-off point are $300,000
-If the net-realizable-value method is used and product C is accounted for as reduction of joint costs, what amount of joint- costs should be allocated to product B?
A) $100,000
B) $118,750
C) $150,000
D) $168,750

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