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Bubble Corp Joint Costs: physical units, NRV, constant GP %

Problem 1:
Bubble Corporation manufactures two products, I and II, from a joint process. A single production costs $4,000 and results in 100 units of I and 400 units of II. To be ready for sale, both products must be processed further, incurring separable costs of $1 per unit for I and $2 per unit for II. The market price for Product I is $20 and for Product II is $15.
Required:
1. Allocate joint production costs to each product using the physical units method.
2. Allocate joint production costs to each product using the net realizable value method.
3. Allocate joint production costs to each product using the constant gross margin percentage method.

Solution Summary

The three methods are illustrated with instructional notes. Click in cells to see computations.

$2.19