LO.3 & LO.4 (Joint cost allocation; by-product) Tangy Fresh produces orange juiceand orange marmalade from a joint process. Second-stage processing of the marmaladecreates an orange pulp by-product that can be sold for $0.05 per gallon. Expenses todistribute pulp total $90.In May 2010, 140,000 pounds of oranges costing $44,200 were processed inDepartment 1, with labor and overhead costs of $33,800 incurred. Department 1processing resulted in 56,000 gallons of output, of which 40 percent was transferredto Department 2 to become orange juice and 60 percent was transferred to Depart-ment 3. Of the input going to Department 3, 20 percent resulted in pulp and 80percent resulted in marmalade. Joint cost is allocated to orange juice and marmaladeon the basis of approximated net realizable values at split-off.The orange juice in Department 2 was processed at a total cost of $9,620; themarmalade in Department 3 was processed at a total cost of $6,450. The net realiz-able value of pulp is accounted for as a reduction in the separate processing costs inDepartment 3. Selling prices per gallon are $5.25 and $3.45 for orange juice andmarmalade, respectively.a. Diagram Tangy Fresh's process in a manner similar to Exhibits 11–5 and 11–10.b. How many gallons leaving Department 1 were sent to Department 2 for furtherprocessing? To Department 3?c. How many gallons left Department 3 as pulp? As marmalade?d. What is the net realizable value of pulp?e. What is the total approximated net realizable value of the orange juice? Themarmalade?f. What amount of joint cost is assigned to each main product?g. If 85 percent of the final output of each main product was sold during May andTangy Fresh had no beginning inventory of either product, what is the value of theending inventory of orange juice and marmalade?

Answered: and orange marmalade from a joint…

and orange marmalade from a joint creates an orange pulp by-product distribute pulp total $90. In May 2010, 140,000 poundi

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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