oint Cost Allocation—Net Realizable Value Method Nature’s Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,588 cubic yards of wood chips, 14,150 cubic yards of mulch, and 9,328 cubic yards of wood pulp. The joint production process costs a total of $32,000 per batch. After the split-off point, wood chips are immediately sold for $30 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $24 and $20 per cubic yard, respectively. The additional production process of the wood pulp costs $3 per cubic yard, after which it is sold for $32 per cubic yard. The additional production process of the mulch costs $2 per cubic yard, after which it is sold for $28 per cubic yard. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Allocate the joint costs of production to each product using the net realizable value method. Do not round intermediate calculations. Round your answers to the nearest dollar. Joint Product Allocation Wood chips Wood pulp Mulch Totals 32,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Joint Cost Allocation—Net Realizable Value Method
Nature’s Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,588 cubic yards of wood chips, 14,150 cubic yards of mulch, and 9,328 cubic yards of wood pulp. The joint production
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Allocate the joint costs of production to each product using the net realizable value method. Do not round intermediate calculations. Round your answers to the nearest dollar.
| Joint Product | Allocation |
|---|---|
| Wood chips | |
| Wood pulp | |
| Mulch | |
| Totals | 32,000 |
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