28 Sep Support Department and Joint Cost Allocation
Order Instructions
Wayne Corporation manufactures three joint products in a single process. The information below is for August 2022:
Product
Gallons
Sales value at split-off
Cost after split-off
Final selling price
WC-3530
4,500
14SAR
4SAR
24SAR
WC-3560
18,000
8SAR
5SAR
15SAR
WC-3590
13,500
18SAR
2SAR
22SAR
Allocate the joint cost of 600,000SAR to the production based on the following (round to the nearest whole percentage):
1. Number of gallons
2. Sales value at split-off
3. Approximate net realizable value at split-off
4. Do you see any problems with the allocation based on the net realizable value? Explain.
5. Which method seems to be the most realistic and relevant given what we know about the costs?
