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17-21 JOINT-COST ALLOCATION, INSURANCE SETTLEMENT. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 was $50. A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.

17-21 JOINT-COST ALLOCATION, INSURANCE SETTLEMENT. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 was $50. A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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17-21 JOINT-COST ALLOCATION, INSURANCE SETTLEMENT. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 was $50. A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
Transcribed Image Text:17-21 JOINT-COST ALLOCATION, INSURANCE SETTLEMENT. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 was $50. A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
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