Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During

Red Sauce Canning Company - Net Realizable Value Method

Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X5, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:

Product         Cases        Sales Value at Splitoff Point     Separable Costs        Selling Price       

Catsup          100,000    $6 per case                              $3.00 per case          $28 per case

Juice             150,000    8 per case                                5.00 per case            25 per case

Canned         200,000    5 per case                                2.50 per case            10 per case

Required:

Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product. CLICK HERE FOR SOLUTION