Joint Costs Allocation using the Net Realizable Value Method (Managerial Accounting Series)
In this managerial accounting presentation I discuss how we will allocate joint costs using the net realizable value method. The net realizable value method only works if we can further process the split joint products or else it will be exactly like the sales method. Use NRV (selling price - selling costs) to come up with the NRV and then to prorate the $100,000 of joint cost between chemical A and B. The ending allocation yields $73,333 and 26,667 for A and B which is less than the NRV of $110,000 and $40,000. Watch the video to see how this method is performed!
Subscribe: http://www.youtube.com/subscription_center?add_user=ininjanotes
** Ninjanotes is privately owned and exclusive to ninjanotes.ca. Our products and services are not associated with any other "ninja" products or business tutorial/test prep material. **
Website: http://www.ninjanotes.ca
Follow us on Facebook: https://www.facebook.com/pages/Ninja-Notes/334589563245679
Follow us on Twitter: http://twitter.com/ininjanotes
We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites!
