(By-products and cost allocation) Bay shore Manufacturing has a joint process that yields three products: M, N, and O. The company allocates the joint cost to the products on the basis of pounds of output. A particular joint process run cost $115,000 and yielded the following output by weight:
Product |
Weight in Pounds |
M |
4,800 |
N |
13,000 |
O |
4,200 |
The run also produced by-products having a total net realizable value of $15,000. The company records by-product inventory at the time of production. Allocate the joint cost to the joint products.