Bonita & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Bonita currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce $164,000 3,000 gallons $9 per gallon 14,000 pounds $21,000 $218,000

Bonita & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Bonita currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce $164,000 3,000 gallons $9 per gallon 14,000 pounds $21,000 $218,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Gibson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 15,000 pounds of raw chicken that costs $8,200, the company produces two parts: 2,000 pounds of drumsticks and 5,000 pounds of breast for a processing cost of $3,887. The chicken breast is further processed into 4,200 pounds of steak for a processing cost of $2,200. The market price of drumsticks per pound is $1.65 and the market price per pound of chicken steak is $4.20. If Gibson decided to sell chicken breast instead of chicken steak, the price per pound would be $2.40. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a-2. Calculate the gross profit for each product. a-3. If the drumsticks are producing a loss, should that product line be eliminated? b-1. Reallocate the joint cost to the…
Kathy’s Kettle Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Kathy has a rigorous inspection process. For quality control purposes, Kathy has a standard based on the number of pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Kathy expects that for every 1,000 pounds of chips produced, 200 pounds of chips will be inspected. Inspection of 200 pounds of chips should take 1 hour. Kathy also expects that 1% of the chips inspected will fail the inspection. During the month of May, Kathy produced 113,000 pounds of chips and inspected 22,300 pounds of chips in 120 hours. Of the 22,300 pounds of chips inspected, 215 pounds of chips failed to pass the inspection. Q. Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection
Annie's Homemade has been invited to submit a bid to cater a Memorial Day picnic with 60 servings of four flavors for a total of 240 pre-packaged servings of ice cream. Annie's' average ingredient and packaging costs (including cup, lid, spoon, and stickers) are $1.50 per serving. It would cater the event with one manager, whose is paid an annual salary of $40,000 (or an average of $20.00 per hour), and two additional employees who are paid $8.00 per hour. The wedding party expects Annie's staff to remain on-site for two hours to serve ice cream. The round-trip drive time to the event plus the tent setup and breakdown time is 1.50 hours. The wedding is 40 miles round-trip and the company pickup truck's diesel fuel, diesel exhaust fluid, and oil expenses are $0.75 per mile. The manager catering the wedding would also spend 3.5 hours manufacturing the ice cream for the picnic and portioning it into six-ounce paper cups. He would be assisted by one employee for two hours who would apply a…
The Laiterie de Coaticook in the Eastern Townships of Quebec produces several types of cheddar cheese. It markets this cheese in four varieties: aged 2 months, 9 months, 15 months, and 2 years. At the producer's store, 2 kg of each variety sell for the following prices: $8.50, $10.00, $11.50, and $12.50, respectively. Consider the cheese maker's decision whether to continue to age a particular 2-pound block of cheese. At 2 months, he can either sell the cheese immediately or let it age further. If he sells it now, he will receive $8.50 immediately. If he ages the cheese, he must give up the $8.50 today to receive a higher amount in the future. What is the IRR (expressed in percent per month) of the investment of giving up $85.00 today by choosing to store 20 kg of cheese that is currently 2 months old and instead selling 10 kg of this cheese when it has aged 9 months, 6 kg when it has aged 15 months, and the remaining 4 kg when it has aged 2 years? The IRR is % per month. (Enter your…
Fontan Cosmetics purchases flowers in bulk and processes them into perfume. From a certain mix of petals, the firm uses Process A to generate Seduction, its high-grade perfume, as well as a certain residue. The residue is then further treated, using Process B, to yield Romance, a medium-grade perfume. An ounce of residue typically yields an ounce of Romance. In July, the company used 25,000 pounds of petals. Costs involved in Process A, i.e., reducing the petals to Seduction and the residue, were: Direct Materials - $440,000; Direct Labor - $220,000; Overhead Costs - $110,000. The additional costs of producing Romance in Process B were: Direct Materials - $22,000; Direct Labor - $50,000; Overhead Costs - $40,000. During July, Process A yielded 7,000 ounces of Seduction and 49,000 ounces of residue. From this, 5,000 ounces of Seduction were packaged and sold for $109.50 an ounce. Also, 28,000 ounces of Romance were processed in Process B and then packaged and sold for $31.50 an…
Rundle Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 16,000 pounds of raw chicken that costs $8,800, the company produces two parts: 4,000 pounds of drumsticks and 5,400 pounds of breast for a processing cost of $7,805. The chicken breast is further processed into 4,600 pounds of steak for a processing cost of $2,600. The market price of drumsticks per pound is $1.75 and the market price per pound of chicken steak is $4.60. If Rundle decided to sell chicken breast instead of chicken steak, the price per pound would be $2.50.
Vishnu
Benson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 14,000 pounds of raw chicken that costs $7,450, the company produces two parts: 2,500 pounds of drumsticks and 4,500 pounds of breast for a processing cost of $2,466. The chicken breast is further processed into 3,700 pounds of steak for a processing cost of $1,700. The market price of drumsticks per pound is $1.40 and the market price per pound of chicken steak is $3.70. If Benson decided to sell chicken breast instead of chicken steak, the price per pound would be $2.20. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a-2. Calculate the gross profit for each product. a-3. If the drumsticks are producing a loss, should that product line be eliminated? b-1. Reallocate the joint cost to the…
The New England Cheese Company produces two cheese spreads by blending mild cheddar cheese with extra sharp cheddar cheese. The cheese spreads are packaged in 12-ounce containers, which are then sold to distributors throughout the Northeast. The Regular blend contains 80% mild cheddar and 20% extra sharp, and the Zesty blend contains 60% mild cheddar and 40% extra sharp. This year, a local dairy cooperative offered to provide up to 7,920 pounds of mild cheddar cheese for $1.20 per pound and up to 2,955 pounds of extra sharp cheddar cheese for $1.40 per pound. The cost to blend and package the cheese spreads, excluding the cost of the cheese, is $0.20 per container. If each container of Regular is sold for $1.90 and each container of Zesty is sold for $2.20, how many containers of Regular and Zesty should New England Cheese produce? Regular Zesty
Delightful Winery produces bottled wines for the hospitality industry in a four-stage process –Pumping, Filtration, Filling and Capping. After leaving the Capping Department, the bottled wines arepackaged and sent to the Finished Goods warehouse for shipment to customers.The following data relates to the Filling Department for the month of June during which 4,000 bottledwines valued at $2,200,000 were transferred from the Filtration Department to the Filling Department.Other production costs incurred during the month are summarized as follows:Direct Materials AddedDirect Manufacturing WagesManufacturing Overhead $342,000$851,200$410,400 Process inspection occurs during the process and normally no losses are expected at this stage.However, during the month 10% of the bottled wines transferred into the Filling Department wererejected at inspection. Rejected units from this department are sold as scrap at $750 per bottle.These units had reached the following degree of completion:Transfer…
Zanda Drug Corporation buys three chemicals that are processed to produce two types of analgesics used as ingredients for popular over-the-counter drugs. The purchased chemicals are blended for two to three hours and then heated for 15 minutes. The results of the process are two separate analgesics, depryl and pencol, which are sent to a drying room until their moisture content is reduced to 6 to 8 per cent. For every 1300 kilograms of chemicals used, 600 kilograms of depryl and 600 kilograms of pencol are produced. After drying. depryl and pencol are sold to companies that process them into their final form. The selling prices are $12 per kilogram for depryl and $30 per kilogram for pencol. The costs to produce 600 kilograms of each analgesic are as follows: Chemicals Direct labour Overhead The analgesics are packaged in 20-kilogram bags and shipped. The cost of each bag is $1.30. Shipping costs $0.10 per kilogram. $8 500 6 735 9 900 Zanda could process depryl further by grinding it…