Answer:
for lead = $ 43,000
for copper = $ 107500
for manganese = $ 63855
Explanation:
Given:
joint cost of processing the raw ore = $ 215,000 per batch
For lead,
Selling cost = $ 62,000
Processing cost = $ 23,000
thus,
the net realizable value = $ 62,000 - $ 23,000 = $ 39,000
also,
For copper,
Selling cost = $ 113,000
Processing cost = $ 15,500
thus,
the net realizable value = $ 113,000 - $ 15,500 = $ 97,500
also,
For manganese,
Selling cost = $ 71,000
Processing cost = $ 12,500
thus,
the net realizable value = $ 71,000 - $ 12,500 = $ 58,500
Now,
the total net realizable value = $ 39,000 + $ 97,500 + $ 58,500
= $ 195,000
therefore,
the allocation weight = ( Net realizable value for the product ) / ( total net realizable value )
thus,
For lead, = $ 39,000 / $ 195,000 = 0.2
For copper = $ 97500 / $ 195,000 = 0.5
For manganese = $ 58000 / $ 195,000 = 0.297
hence, the cost allocation for the respective products will be calculated as
= the allocation weight × joint costs of processing
thus, for lead = 0.2 × $215,000 = $ 43,000
for copper = 0.5 × $215,000 = $ 107500
for manganese = 0.297 × $215,000 = $ 63855
