6 **California Orchards Sales and Joint Cost Allocation**California Orchards reports the following sales data for the year ended December 31:| Grade of Walnuts | Sales ||------------------|----------|| Number 1 | $490,500 || Number 2 | $381,500 || Number 3 | $218,000 || Total | $1,090,000 |The company incurred the following joint costs for the year:- Tree pruning and care: $708,500- Pickup, sorting, and grading: $141,700**Required:**1. Use the value basis to allocate joint costs to the three grades of walnuts on the basis of sales value.**Allocation of Joint Costs on the Basis of Sales Values:**| Grade | Allocation Base | Percent of Allocation Base | × Indirect Cost | Allocated Cost ||-----------|-----------------|----------------------------|-----------------|----------------|| Number 1 | | Numerator: | | || Number 2 | | Denominator: | | || Number 3 | | % of Total: | | || Totals | | | | |- **Grade:** The grade of walnuts (Number 1, Number 2, Number 3).- **Allocation Base:** The sales values for each grade.- **Percent of Allocation Base:** Calculated by dividing the sales of each grade by the total sales to find the percentage.- **Indirect Cost:** Total joint costs to be allocated.- **Allocated Cost:** Amount of joint cost assigned to each grade based on the percentage of the allocation base. This table is used to allocate the joint costs ($850,200) proportionally to each walnut grade based on their respective sales values.

In case there are joint costs than they are allocated on the some basis that may be volume of sales…

California Orchards reports the following sales data for the year ended December 31. Grade of Walnuts Number 1 Number 2 Number 3 Total Sales $ 490, 500 381, 500 218,000 $ 1,090,000 The company incurred the following joint costs for the year. Tree pruning and care $ 708,500 Pickup, sorting, and grading 141, 700

California Orchards reports the following sales data for the year ended December 31. Grade of Walnuts Number 1 Number 2 Number 3 Total Sales $ 490, 500 381, 500 218,000 $ 1,090,000 The company incurred the following joint costs for the year. Tree pruning and care $ 708,500 Pickup, sorting, and grading 141, 700

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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