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    Relative Sales Value Method - Joint Costs

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    Radhika,

    Please help me with this problem as I am totally lost.

    Product M and S are joint products. The joint production cost of the products is $1500. That is, there are costs up to a certain point and we cannot divide the products before that point.
    M has a market value of $2000 at the split-off point. If M is further processed at an additional cost of $900, its market value is $3000.
    Product S has a market value of $3000 at the split-off point. If Product S is further processed at an additional cost of $1000, its market value is $4500.
    Using the relative sales value method (Using the sales price at slit off), calculate the joint product cost that would be allocated to M and S.

    Thank you,

    Mike

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    https://brainmass.com/business/accounting/relative-sales-value-method-joint-costs-587406

    Solution Preview

    Solution attached. Let me know if you have any doubts.

    Product M and S are joint products. The joint production cost of the products is $1500. That is, there are costs up to a certain point and we cannot divide the products before that point.
    M has a market value of $2000 at the split-off point. If M is further processed at an additional cost of $900, its market value is $3000.
    Product S has a market value of $3000 at the split-off ...

    Solution Summary

    This solution of 300 words shows step-by-step calculations to determine the joint production costs, allocation percentage, and sales value.
    The file contains solution for:
    Product M and S are joint products. The joint production cost of the products is $1500. That is, there are costs up to a certain point and we cannot divide the products before that point.

    $2.19