Bonita recently became aware of consumer preferences for flavored tomato juice. With some slight modifications to his facility, he could process the tomato juice further and turn it into clam-flavored tomato juice for an additional processing cost of $1,600. With no change in total volume, this flavored juice could sell for $30,000. Given this new information, recalculate the joint cost allocations for both joint products under the NRV method. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.)
Bonita recently became aware of consumer preferences for flavored tomato juice. With some slight modifications to his facility, he could process the tomato juice further and turn it into clam-flavored tomato juice for an additional processing cost of $1,600. With no change in total volume, this flavored juice could sell for $30,000. Given this new information, recalculate the joint cost allocations for both joint products under the NRV method. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bonita recently became aware of consumer preferences for flavored tomato juice. With some slight
modifications to his facility, he could process the tomato juice further and turn it into clam-flavored tomato
juice for an additional processing cost of $1,600. With no change in total volume, this flavored juice could sell
for $30,000. Given this new information, recalculate the joint cost allocations for both joint products under
the NRV method. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal
places, e.g. 15.25.)
Allocated joint costs $
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Juice
Puree
Transcribed Image Text: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
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