Business, 25.03.2020 03:39 ninaaforever

Net Realizable Value Method, Decision to Sell at Split-off or Process Further Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this process were $60,000, and 14,000 units of overs and 37,000 units of unders were produced. Separable processing costs beyond the split-off point were as follows: overs, $18,000; unders, $26,180. Overs sell for $2.00 per unit; unders sell for $3.14 per unit. Required: 1. Allocate the $60,000 joint costs using the estimated net realizable value method. Allocated Joint Cost Overs $ 6,000 Unders $ 54,000 2. Suppose that overs could be sold at the split-off point for $1.80 per unit. Should Pacheco sell overs at split-off or process them further? Overs should not be processed further as there will be $ 25,200 more profit if sold at split-off.

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