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As a start-up company, Oriole Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Sharon is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Sharon is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. (b) Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. eTextbook and Media The intern must have used the Net Realizable Value Method Your answer is partially correct. $46,020 $403,000 (1) The joint process $ $23,600 (2) Further processing of product Y $ 88.2% 200000 Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) method. 6157.62 Attempts: 3 of 4 used

As a start-up company, Oriole Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Sharon is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Sharon is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. (b) Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. eTextbook and Media The intern must have used the Net Realizable Value Method Your answer is partially correct. $46,020 $403,000 (1) The joint process $ $23,600 (2) Further processing of product Y $ 88.2% 200000 Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) method. 6157.62 Attempts: 3 of 4 used

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 32P
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As a start-up company, Oriole Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Sharon is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Sharon is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. (b) Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method eTextbook and Media Your answer is partially correct. (1) The joint process $46,020 $403,000 $23,600 $ 88.2% (2) Further processing of product Y $ Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) 200000 method. 6157.62 Attempts: 3 of 4 used
Transcribed Image Text:As a start-up company, Oriole Enterprises encourages its employees to think through the entire value chain to estimate whether it might be worthwhile to take a risk on new products. As part of that program, Sharon is reviewing a product concept that her intern presented to her. The basic idea is to use a common process, which would result in two intermediate products. One product could be sold right away (X). The other product (Y) would have no immediate sales value but after further processing would yield a very high- value product. Sharon is intrigued enough to dig further into her intern's quantitative analysis, as follows. Sales value of X immediately after the joint process Sales value of Y after further processing Product X's share of the joint process cost Proportion of joint cost allocated to Product Y (a) Your answer is correct. (b) Based on this information, determine which joint cost allocation method the intern must have used when allocating the joint costs to these products. The intern must have used the Net Realizable Value Method eTextbook and Media Your answer is partially correct. (1) The joint process $46,020 $403,000 $23,600 $ 88.2% (2) Further processing of product Y $ Calculate how much total cost the intern included in the above estimate for (1) the joint process and (2) further processing of product Y. (Round answers to O decimal places, e.g. 5,125.) 200000 method. 6157.62 Attempts: 3 of 4 used
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