the sales method now we can probably talk but the last one which is the net
realizable value method
and what's different in this method is that we have joining costs
like always which are before the split of
want that you can see which is that little
circle rate they're splitting up into those two different products and the
drunk author of course
our materials labor
and over how to keep gone but we're also going to have
Cross St in cost so that's what the different
heard the net realizable value method Raksha gonna take
chemical a and chemical be and we're gonna further processed them
a bit more so that they can actually be cross this
chemicals and you a bit more revenue per unit so that we have more revenue
from across us good to reduce further cross the scene it's always remember
that the processing cost
come after that's what up point well the joint cost com
be4 the split-off point and I do have this question here which was
form for the net realizable by a mother just at the bit more
course much longer arm
before we begin though I just wanted to say one thing and that's just to
remember that's
net realizable value might that be all means that it's not that is the crossing
cost so if we didn't have these processing costs
and we didn't further crosses these chemicals and chemical be
than what would happen is that
be when exists obviously in you just have to join cause
and this would actually be the exact
same thing as the sales map that
so because the because im now we have crossing cost
this is actually going to you I be useful
free been are allies both by Matt so if we actually don't have this processing
cost we wouldn't be able
to use this not that you allocate
the joint costs it is always remember that remember that you're crossing costs
and wealthier with their
in a second so the joint crosses one hundred thousand dollars
great barry their reproduce the 100 only to the bay and its belt made it would be
just like in the last question
the console them for ninety cents a liter and be sixty-some the leader so
that is
before be crossed them even further after the split up
points just by just buy a this hundred thousand or the joint cost and splitting
them into A&B
he would yield that much her unit but since work for the Cross St nom
with more costs they're going to yield a higher
unit price which is a dollar the keeper a and one dollar per be and processing
cost
for a are going to be forty thousand dollars
while the crossing costs per be are going to be ten thousand dollars in that
way
will be able you bring in more revenue
her unit's so to actually begin we're going to be
I am we're gonna be looking at ads the net realizable
value I love be chemical a.m. chemical be an issue for gone with net realizable
value is
it's just the just selling praise
minus the selling costs
you for gotten from financial accounting because this comes up in financial
accounting are injured
financial accounting so basically let's bear with a sewing cost dispersed
for a its gonna you'll adore fifty cents a leader since we've crosses to
and we have a hundred thousand meters which is going to be
for a we're gonna have a hundred fifty thousand dollars
revenue or sales
and the sewing costs are going to get across the cause up forty
thousand dollars which is going to be 110
which is the net realizable value for a and we could include the joint
cost but the thing is we haven't
allocated the joint cost between a in be it so we don't actually know how much
join cost
is actually allocated systems that the unknown we can't included
I hadn't heard a bar in our lives more by iraq should have to do that
ap third so right now are not reliable diet for a
is one an while for be
it's going to be one leader or one dollar leader times
,000 leaders fifty thousand dollars that means
subtract that crossing cost ten thousand dollars
which is going to be 40 thousand dollars I've been a realizable
value so those are the net realizable values
for ANBU images to rate down to read here
but I do not heard jets
my memory is horrible be is
forty thousand dollars and look at it stop at the top to actually
start allocating you 110 thousand dollars between
chemical and chemical be so the net realizable value
for a and Kirby is so that's going to be a hundred and ten thousand dollars
and Herbie it's going to be forty thousand dollars which is in total
fifty thousand dollars and we're going to keep her raids this a hundred
thousand dollars
allocated between chemical and be by
you seen the same at the battery out for fiscal
and the sales method which is we just take the one hundred and ten thousand
dollars a
the yeah it which is the net realizable value divided by
be total or I should say this is one fifty not not fifty thousand
and that's going to yield up percentage so that we can allocate
you hundred thousand dollars between need to be to chemical services actually
going to be 110,000
divided by one 50 is 73
points 33 percent swell
that will be a for you thousand
dollars divided by
26,000 dollars which is going to be the residual which is 26%
.6 7 Chris sands
and now we're gonna do is we're just going to you I
use the percentages to you our gear between A&B hysteretic 7 3.33 percent
what's planned out by one hundred thousand dollars which is our joint cost
and we will have a join cause allocated to a up seventy 3300
and 33 while for being it's going to be 26.67 percent
times 100000 and that's going to be
the residual be one hundred thousand dollars which is going to be 26,000
I just rented a
this up to a seven that's why I I'm it's not going to create this
this number but a few words here carry all the sixes Rd 26.66
seven so that is the
just the the amount allocated between A&B and those are the joint costs
if on your test their ass you to join cost up chemical and chemical be
you really state use two numbers and if they were to ask you
what is the total was
total cost you were just had
be crossing cost with its a seventy 3,333
plus 40,000
and that's going to be a 113 thousand 333
while Kirby it will be ten thousand or I should say
Elser at the allocated amount first 26,000 667 plus
,000 and hurry and up with
,000 600 at 67 so we're finally done a
that is the total cost so we ever not reliable values
if they ask you that we have are allocated join costs and we have our
total cost
or chemical and be so hopefully you understand this tutorial
all be sure to add probably more managerial accounting
articles in the future. Thans for visit.
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