[anamk12]

A company manufactures two main products, J and K, and the by-product L. The by-product has a net realisable value of $2 per litre. The following information relates to last month, when there were no opening inventories.

 
Product

J. K. L

Litres. Litres. Litres

Production

50,000. 40,000. 10,000

Sales. 45,000. 30,000. 10,000

 
Joint costs last month were $290,000. Company policy is to apportion joint costs on a physical measure basis and to treat the net realisable value of the by-product as a deduction from the cost of the main products.

What was the cost value of last month’s closing inventory of product J?

(i) $13,500
(ii) $16,200
(iii) $16,400
(iv) $15,000

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