Please don't give image based answer..thanku GreenupMaintaneWinterizerSelling expenses are 20 percent of the sales price.The Retail Sales Division manager has complained that the prices charged by the Manufacturing Division are excessive and that hewould prefer to purchase from another supplier.The Manufacturing Division manager argues that the processing mix was determined based on a careful analysis of the costs of eachproduct compared to the prices charged by the Retail Sales Division.Required:a. Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. What is the costper pound of each product, including fixed overhead and the feedstock cost of $1.70 per pound, given the current productionschedule?b. Assume that joint production costs including fixed overhead are allocated to each product on the basis of net realizable value if soldthrough the cooperative's Retail Sales Division. What is the allocated cost per pound of each product, given the current productionschedule?Sales Price perPound$12.0010.5011.90c. Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. Calculate theoperating profit under both Schedule A and Schedule B.Complete this question by entering your answers in the tabs below.Required AAllocated costRequired AAssume that joint production costs including fixed overhead are allocated to each product on the basis of weight. What is thecost per pound of each product, including fixed overhead and the feedstock cost of $1.70 per pound, given the currentproduction schedule? (Do not round intermediate calculations. Round your answer to 2 decimal places.)per poundGreenupMaintaneWinterizerRequired BRequired ARequired CRequired BAssume that joint production costs including fixed overhead are allocated to each product on the basis of net realizable valueif sold through the cooperative's Retail Sales Division. What is the allocated cost per pound of each product, given the currentproduction schedule? (Do not round intermediate calculations. Round your answers to 2 decimal places.)Operating profit< Required ARequired CAllocated Costper poundper poundper pound< Required AComplete this question by entering your answers in the tabs below.Schedule ARequired B Required CAssume that joint production costs including fixed overhead are allocated to each product on the basis of weight. Calculatethe operating profit under both Schedule A and Schedule B. (Do not round intermediate calculations. Round your answers to 2decimal places.)Required B >Schedule BRequired C >< Required BRequired C > Integrative Case 11-77 (Algo) Effect of Cost Allocation on Pricing and Make versus Buy Decisions (LO 11-7, 8)Ag-Coop is a large farm cooperative with a number of agriculture-related manufacturing and service divisions. As a cooperative, it paysno federal income taxes. The company owns a fertilizer plant that processes and mixes petrochemical compounds into three brands ofagricultural fertilizer: greenup, maintane, and winterizer. The three brands differ with respect to selling price and the proportionalcontent of basic chemicals.Ag-Coop's Fertilizer Manufacturing Division transfers the completed product to the cooperative's Retail Sales Division at a price basedon the cost of each type of fertilizer plus a markup.The Manufacturing Division is completely automated so that the only costs it incurs are the costs of the petrochemical feedstocks plusoverhead that is considered fixed. The primary feedstock costs $1.70 per pound. Each 100 pounds of feedstock can produce either ofthe following mixtures of fertilizer.GreenupMaintaneWinterizerOutput Schedules (inpounds)ProductGreenupMaintaneWinterizerA503020Production is limited to the 950,000 kilowatt-hours monthly capacity of the dehydrator. Due to different chemical makeup, each brandof fertilizer requires different dehydrator use. Dehydrator usage in kilowatt-hours per pound of product follows.B601030Kilowatt-Hour Usageper Pound.402848Monthly fixed costs are $85,000. The company currently is producing according to output schedule A. Joint production costs includingfixed overhead are allocated to each product on the basis of weight.The fertilizer is packed into 100-pound bags for sale in the cooperative's retail stores. The sales price for each product charged by thecooperative's Retail Sales Division follows.

Operating income is the net income which is estimated by deducting the cost of goods sold and all…

Answered: Ag-Coop is a large farm cooperative…

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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Please don't give image based answer..thanku

Greenup
Maintane
Winterizer
Selling expenses are 20 percent of the sales price.
The Retail Sales Division manager has complained that the prices charged by the Manufacturing Division are excessive and that he
would prefer to purchase from another supplier.
The Manufacturing Division manager argues that the processing mix was determined based on a careful analysis of the costs of each
product compared to the prices charged by the Retail Sales Division.
Required:
a. Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. What is the cost
per pound of each product, including fixed overhead and the feedstock cost of $1.70 per pound, given the current production
schedule?
b. Assume that joint production costs including fixed overhead are allocated to each product on the basis of net realizable value if sold
through the cooperative's Retail Sales Division. What is the allocated cost per pound of each product, given the current production
schedule?
Sales Price per
Pound
$12.00
10.50
11.90
c. Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. Calculate the
operating profit under both Schedule A and Schedule B.
Complete this question by entering your answers in the tabs below.
Required A
Allocated cost
Required A
Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. What is the
cost per pound of each product, including fixed overhead and the feedstock cost of $1.70 per pound, given the current
production schedule? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
per pound
Greenup
Maintane
Winterizer
Required B
Required A
Required C
Required B
Assume that joint production costs including fixed overhead are allocated to each product on the basis of net realizable value
if sold through the cooperative's Retail Sales Division. What is the allocated cost per pound of each product, given the current
production schedule? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Operating profit
< Required A
Required C
Allocated Cost
per pound
per pound
per pound
< Required A
Complete this question by entering your answers in the tabs below.
Schedule A
Required B Required C
Assume that joint production costs including fixed overhead are allocated to each product on the basis of weight. Calculate
the operating profit under both Schedule A and Schedule B. (Do not round intermediate calculations. Round your answers to 2
decimal places.)
Required B >
Schedule B
Required C >
< Required B
Required C >

Transcribed Image Text:Integrative Case 11-77 (Algo) Effect of Cost Allocation on Pricing and Make versus Buy Decisions (LO 11- 7, 8) Ag-Coop is a large farm cooperative with a number of agriculture-related manufacturing and service divisions. As a cooperative, it pays no federal income taxes. The company owns a fertilizer plant that processes and mixes petrochemical compounds into three brands of agricultural fertilizer: greenup, maintane, and winterizer. The three brands differ with respect to selling price and the proportional content of basic chemicals. Ag-Coop's Fertilizer Manufacturing Division transfers the completed product to the cooperative's Retail Sales Division at a price based on the cost of each type of fertilizer plus a markup. The Manufacturing Division is completely automated so that the only costs it incurs are the costs of the petrochemical feedstocks plus overhead that is considered fixed. The primary feedstock costs $1.70 per pound. Each 100 pounds of feedstock can produce either of the following mixtures of fertilizer. Greenup Maintane Winterizer Output Schedules (in pounds) Product Greenup Maintane Winterizer A 50 30 20 Production is limited to the 950,000 kilowatt-hours monthly capacity of the dehydrator. Due to different chemical makeup, each brand of fertilizer requires different dehydrator use. Dehydrator usage in kilowatt-hours per pound of product follows. B 60 10 30 Kilowatt-Hour Usage per Pound. 40 28 48 Monthly fixed costs are $85,000. The company currently is producing according to output schedule A. Joint production costs including fixed overhead are allocated to each product on the basis of weight. The fertilizer is packed into 100-pound bags for sale in the cooperative's retail stores. The sales price for each product charged by the cooperative's Retail Sales Division follows.

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