Gem Potato Processors – Joint Costs

Don't use plagiarized sources. Get Your Custom Essay on
Need an answer from similar question? You have just landed to the most confidential, trustful essay writing service to order the paper from.
Just from $13/Page
Order Now

Potato Processors produces three products: fries, nuggets and crunchy peels.
They are all made from a cull potatoes they purchase from sorting sheds. Follow
is information about each product.

  Fries  Nuggets  Peelings

Pounds Produced  50,000  40,000  10,000

Pounds Sold at
Retail Point  45,000  35,000  10,000

Sales Price at Split-off  $3.00  $2.00  $1.00

Retail Sales Price  $5.00  $4.00  $1.00

Separate Costs  $50,000  $20,000  $0

Joint Costs before
Split-off Point is $200,000.


  1. Allocate the
    joint costs using the NRV method.
  2. Allocate the
    joint costs using the physical units method.
  3. What is the
    other acceptable method used to allocate joint costs?
  4. Which is the
    best method and why?