Allocating Joint Costs Using the Sales-Value at Split Off Point Assume that Orchard Fresh Inc, uses the sales value at split off method of joint cost allocation and has provided the foilowing information about the four grades of apples: Grades Pounds Price at Split Off (per Ib.) Grade A 1,600 $4 Grade B 5,000 1.00 Slices 8,000 0.50 Applesauce Total 5,400 20,000 0.10 Total joint cost is $18,000. Requirement: 1. Allocate the joint cost to the four grades of apples using sales value at split off method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollars.) 2. What IF the price at split off point of Grade Bapples increased to $1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of costs to the remaining grades? Exercise #2 Allocating Joint Costs Using the Net Realizable Value Method A company manufactures three products, L-Ten, Triol and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further., Information on one batch of the three products is as follows: Product Gallons Further sing per Gallon Market Price Gallon L-Ten 3,500 $0.50 $2.00 Triol 4,000 1.00 5.00 Pioze 2,500 1,50 6.00 Requirement: 1. Allocate joint costs to L-Ten, Triol and Pioze using the net realizable value method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollars.) 2. What if it cost $2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products?
Allocating Joint Costs Using the Sales-Value at Split Off Point Assume that Orchard Fresh Inc, uses the sales value at split off method of joint cost allocation and has provided the foilowing information about the four grades of apples: Grades Pounds Price at Split Off (per Ib.) Grade A 1,600 $4 Grade B 5,000 1.00 Slices 8,000 0.50 Applesauce Total 5,400 20,000 0.10 Total joint cost is $18,000. Requirement: 1. Allocate the joint cost to the four grades of apples using sales value at split off method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollars.) 2. What IF the price at split off point of Grade Bapples increased to $1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of costs to the remaining grades? Exercise #2 Allocating Joint Costs Using the Net Realizable Value Method A company manufactures three products, L-Ten, Triol and Pioze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further., Information on one batch of the three products is as follows: Product Gallons Further sing per Gallon Market Price Gallon L-Ten 3,500 $0.50 $2.00 Triol 4,000 1.00 5.00 Pioze 2,500 1,50 6.00 Requirement: 1. Allocate joint costs to L-Ten, Triol and Pioze using the net realizable value method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollars.) 2. What if it cost $2 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products?
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