Using the relative sales value method using the sales price


Product M and S are joint products. The joint production cost of the products is $1500. That is, there are costs up to a certain point and we cannot divide the products before that point.

M has a market value of $2000 at the split-off point. If M is further processed at an additional cost of $900, its market value is $3000.
Product S has a market value of $3000 at the split-off point. If Product S is further processed at an additional cost of $1000, its market value is $4500.

Using the relative sales value method (Using the sales price at slit off), calculate the joint product cost that would be allocated to M and S.

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Finance Basics: Using the relative sales value method using the sales price
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