Allocating Joint Costs Using the Weighted Average Method 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. Thes are packed in boxes and sold 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 20,000 pounds of peaches is as follows: Assume that Sunny Lane, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades peaches: Grades Pounds Weight Factor Grade A 1,500 3.0 Grade B 5,000 2.0 Slices 8,000 0.5 Pureed 5,500 1.0 Total 20,000 Total joint cost is $18,000. Required: 1. Allocate the joint cost to the four grades of peaches using the weighted average method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation Grade A 3,375V Grade B 7,500 x Slices 3,000 x Pureed 4,125 X
Allocating Joint Costs Using the Weighted Average Method 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. Thes are packed in boxes and sold 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 20,000 pounds of peaches is as follows: Assume that Sunny Lane, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades peaches: Grades Pounds Weight Factor Grade A 1,500 3.0 Grade B 5,000 2.0 Slices 8,000 0.5 Pureed 5,500 1.0 Total 20,000 Total joint cost is $18,000. Required: 1. Allocate the joint cost to the four grades of peaches using the weighted average method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Joint Cost Grades Allocation Grade A 3,375V Grade B 7,500 x Slices 3,000 x Pureed 4,125 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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BEX.07.08 red x is wrong do not put same number as red x
![Allocating Joint Costs Using the Weighted Average Method
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 20,000 pounds of peaches is as follows: Assume that Sunny Lane, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades of peaches:
Grades
Pounds
Weight Factor
Grade A
1,500
3.0
Grade B
5,000
2.0
Slices
8,000
0.5
Pureed
5,500
1.0
Total
20,000
Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of peaches using the weighted average method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades
Allocation
Grade A
2$
3,375 V
Grade B
7,500 X
Slices
3,000 x
Pureed
4,125 x
Total
18,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5967ae0b-1e8d-4137-907e-4e698101e1eb%2F46cbae10-f5fa-4946-9488-96305e6855c9%2F10l0tgs_processed.png&w=3840&q=75)
Transcribed Image Text:Allocating Joint Costs Using the Weighted Average Method
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 20,000 pounds of peaches is as follows: Assume that Sunny Lane, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades of peaches:
Grades
Pounds
Weight Factor
Grade A
1,500
3.0
Grade B
5,000
2.0
Slices
8,000
0.5
Pureed
5,500
1.0
Total
20,000
Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of peaches using the weighted average method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades
Allocation
Grade A
2$
3,375 V
Grade B
7,500 X
Slices
3,000 x
Pureed
4,125 x
Total
18,000
![Total
$1
18,000
(Note: The joint cost allocation does not equal $18,000 due to rounding.)
2. What if the factory found that Grade A peaches were being valued less by customers and decided to decrease the weight factor for Grade A peaches to 2.0? How would that affect the allocation of cost to Grade A peaches? How would it affect the
allocation of cost to the remaining grades? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades
Allocation
Grade A
2,400 x
Grade B
Slices
3,200 V
Pureed
4,400
Total
$
18,000 V
(Note: The joint cost allocation does not equal $18,000 due to rounding.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5967ae0b-1e8d-4137-907e-4e698101e1eb%2F46cbae10-f5fa-4946-9488-96305e6855c9%2F0lv66dd_processed.png&w=3840&q=75)
Transcribed Image Text:Total
$1
18,000
(Note: The joint cost allocation does not equal $18,000 due to rounding.)
2. What if the factory found that Grade A peaches were being valued less by customers and decided to decrease the weight factor for Grade A peaches to 2.0? How would that affect the allocation of cost to Grade A peaches? How would it affect the
allocation of cost to the remaining grades? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades
Allocation
Grade A
2,400 x
Grade B
Slices
3,200 V
Pureed
4,400
Total
$
18,000 V
(Note: The joint cost allocation does not equal $18,000 due to rounding.)
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