Problem:
Shelly Inc. manufactures Nuts and Bolts. The initial stages of manufacturing involve joint costs totally $50,000. At the split-off point we have 4,000 lbs. of Nuts which can sell for $18 per pound and 6,000 lbs. of Bolts which can sell for $13.50 per pound.
Required:
Question 1: Assuming joint costs are allocated using relative salves value, what amount of joint cost should be allocated to Nuts?
Question 2: Assuming joint costs are allocated using relative salves value, what amount of joint cost should e allocated to Bolts?
Question 3: Assuming joint costs are allocated using physical units, what amount of joint cost should be allocated to Nuts?
Question 4: Assuming joint costs are allocated using physical units, what amount of joint cost should be allocated to Bolts?
Note: Please provide full description.