as is to supermarket chains and to specialty gift stores. Good peaches are slicedand canned in light syrup and sold to supermarkets. Fair peaches are considereda by-product and are sold to Altas Company, which processes the peaches intojelly.Fredericksburg Vegetable has two processing departments: (1) Cleaning and Sort-ing (joint cost) and (2) Cutting and Canning (separate costs). During the month, thecompany paid $15,000 for one truckload of fruit and $700 for labor to sort the fruitinto categories. Fredericksburg Vegetable uses a predetermined overhead rate of 40percent of direct labor cost. The following yield, costs, and final sales value resultedfrom the month's truckload of fruit.PremiumGoodFairYield in pecks1,5002,000500Cutting and canning costs$2,000soTotal packaging and delivery costs$1,500$2,200$500Total final sales value$30,000$15,000$4,500a. Determine the joint cost.b. Diagram Fredericksburg Vegetable's process in a manner similar to Exhibits 11-5and 11-10.c. Allocate joint cost using the approximated net realizable value at split-off method,assuming that the by-product is recorded when realized and is shown as OtherIncome on the income statement.d. Using the allocations from (c), prepare the necessary entries assuming that theby-product is sold for $4,500 and that all costs were as shown.e. Allocate joint cost using the approximated net realizable value at split-offmethod, assuming that the by-product is recorded using the net realizable valueapproach and that the joint cost is reduced by the net realizable value of theby-product.f. Using the allocations from (d), prepare the necessary entries, assuming that theestimated realizable value of the by-product is $4,000. 45. LO.3 & LO.4 (Joint products; by-product) Fredericksburg Vegetable is a fruit-packing business. The firm buys peaches by the truckload in season and separatesthem into three categories: premium, good, and fair. Premium peaches can be sold

Joint cost refers to the cost or expense which is incurred under the joint process and it might…

as is to supermarket chains and to specialty gift stores. Good peaches are sliced and canned in light syrup and sold to supermarkets. Fair peaches are considered a by-product and are sold to Altas Company, which processes the peaches into jelly. Fredericksburg Vegetable has two processing departments: (1) Cleaning and Sort- ing (joint cost) and (2) Cutting and Canning (separate costs). During the month, the company paid $15,000 for one truckload of fruit and $700 for labor to sort the fruit into categories. Fredericksburg Vegetable uses a predetermined overhead rate of 40 percent of direct labor cost. The following yield, costs, and final sales value resulted from the month's truckload of fruit. Premium Good Fair Yield in pecks 1,500 2,000 500 Cutting and canning costs $2,000 so Total packaging and delivery costs $1,500 $2,200 $500 Total final sales value $30,000 $15,000 $4,500

as is to supermarket chains and to specialty gift stores. Good peaches are sliced and canned in light syrup and sold to supermarkets. Fair peaches are considered a by-product and are sold to Altas Company, which processes the peaches into jelly. Fredericksburg Vegetable has two processing departments: (1) Cleaning and Sort- ing (joint cost) and (2) Cutting and Canning (separate costs). During the month, the company paid $15,000 for one truckload of fruit and $700 for labor to sort the fruit into categories. Fredericksburg Vegetable uses a predetermined overhead rate of 40 percent of direct labor cost. The following yield, costs, and final sales value resulted from the month's truckload of fruit. Premium Good Fair Yield in pecks 1,500 2,000 500 Cutting and canning costs $2,000 so Total packaging and delivery costs $1,500 $2,200 $500 Total final sales value $30,000 $15,000 $4,500

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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