Net realizable value method. Convad Company is one of the world’s leading corn refiners. It produces two joint products—corn syrup and corn starch—using a common production process. In July 2012, Convad reported the following production and selling price information:
|
A |
B |
C |
D |
|
|
1 |
Corn Syrup |
Corn Starch |
Joint Costs |
|
|
2 |
Joint costs (costs of processing corn to split off point) |
$3 2 5,000 |
||
|
3 |
Separable cost of processing beyond split off point |
$375,000 |
$ 93,750 |
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|
4 |
Beginning inventory (cases) |
0 |
0 |
|
|
5 |
Production and Sales (cases) |
12,500 |
6,250 |
|
|
6 |
Ending inventory (cases) |
0 |
0 |
|
|
7 |
Selling price per case |
50 |
$ 25 |
Allocate the $325,000 joint costs using the NRV method. Required