Allocate the joint cost to the four grades of peaches by finding the average joint cost per pound and multiplying it by the number of pounds in the grade
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Sunny Lane, Inc., purchases peaches from local orchards and sorts them into four categories. Grade A are large blemish-free peaches that can be sold to gourmet fruit sellers. Grade B peaches are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Peaches to be sliced for canned peaches are even smaller than Grade B peaches and have blemishes. Peaches to be pureed for use in sauces are of lower grade than peaches for slices, yet still food grade for canning. Information on a recent purchase of 26,000 pounds of peaches is as follows:
Grades Pounds Grade A 2,080 Grade B 5,200 Slices 9,100 Pureed 9,620 Total 26,000 Total joint cost is $19,500.
Required:
1. Allocate the joint cost to the four grades of peaches using the physical units method.
Joint Cost Grades Allocation Grade A $fill in the blank 1 Grade B fill in the blank 2 Slices fill in the blank 3 Pureed fill in the blank 4 Total $fill in the blank 5 2. Allocate the joint cost to the four grades of peaches by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent.
Average cost = $fill in the blank 6 per pound.
Joint Cost Grades Allocation Grade A $fill in the blank 7 Grade B $fill in the blank 8 Slices $fill in the blank 9 Pureed $fill in the blank 10 3. What if there were 2,600 pounds of Grade A peaches and 4,680 pounds of Grade B? How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades?
Joint Cost Grades Allocation Grade A $fill in the blank 11 Grade B $fill in the blank 12 Slices $fill in the blank 13 Pureed $fill in the blank 14
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