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Accounting Question
Learning Goal: I’m working on a accounting test / quiz prep and need an explanation and answer to help me learn.
Dairy Food Corp. produces two types of cheese: cheddar and cream. The results of last year’s operations were as follows:
Cheddar
Cream
Total
Production
2,000 kilograms
3,000 kilograms
5,000 kilograms
Sales value at split-off point
$20,000
$25,000
$45,000
Revenue
$45,000
$75,000
$120,000
Separable costs
$10,000
$7,500
$17,500
Joint costs
$50,000
Required:
Allocate the joint costs using the physical output method.
Allocate the joint costs using the sales value at the split-off point method.
Allocate the joint costs using the NRV method.
Allocate the joint costs using the constant gross margin NRV method.
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