Financial accounting Dairy Delight Co. produces fresh milk at a total cost of $82,000. Theirproduction yields 70,000 gallons of milk which they can either:1. Sell directly to distributors for $1.20 per gallon, or2. Process it further into premium yogurt and sell for $3.00 per gallonThe additional cost to process milk into yogurt is $95,000.

Step 1: Define Key ConceptsIncremental Revenue - The additional revenue generated from processing…

Answered: Dairy Delight Co. produces fresh milk…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6EA: Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in...

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Wholesome Dairy processes milk. The cost of the milk processing is $1,370,000. Wholesome is looking to increase its net income and is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make a half gallon of ice cream. Selling Price 822,000 gallons $3.09 per gallon 6.21 per half gallon Units Produced Product Milk Ice Cream Required: 1. How many half gallons of ice cream can Wholesome make? 2. What are the additional processing costs to convert the milk to ice cream? 3. Should Wholesome sell the milk or process it further and sell ice cream?
Graham Corp. has 1,000 cartons of oranges that were harvested at a cost of $28,400. The oranges can be sold as is for $33,200. The oranges can be processed further into orange juice at an additional cost of $12,750 and be sold at a price of $49,500. The net benefit (additional income) from processing the oranges into orange juice instead of selling as is would be: rev: 12_08_2020_QC_CS-243270 Multiple Choice $(3,550). $(16,300). $16,300. $3,550. $36,750.
M & Z Creameries, Corp. process milk and sugar to make vanilla ice cream. They sell their ice cream in large one-gallon containers to schools, hospitals, nursing homes, and restaurants. Each batch produces 1,700 gallons of ice cream at a cost of $840 per batch. M & Z Creameries, Corp. sells the one-gallon containers for $23.00 each and spends $0.35 for each plastic container. M & Z Creameries, Corp. has started to determine the feasibility of adding chocolate and strawberries and sell pint-size portions at local supermarkets.Further processing of each batch of ice cream could produce 24,400 pint-sized portions. A recent market study determined a demand existed for this type of product. M & Z Creameries, Corp. could sell each pint-sized portion for $2.70. Additional packaging would cost $0.30 per pint, and the additional materials would cost $0.25 per pint. There would be no change in fixed costs.Should they continue to sell only one-gallon size containers of vanilla ice…
Hal, Dal, & Stal Dairy Farmers, Inc., produces whole milk, 2% milk, and cream. The joint cost of producing these three products is $4,000. The split-off quantities of each product are 3,500 gallons of whole milk, 1,500 gallons of 2% milk, and 500 gallons of cream. The company can sell whole milk and cream at the split-off point, but 2% milk must be processed further before being sold. Whole milk and cream sell for $2.00 per gallon and $3.00 per gallon, respectively, at the split-off point. Although 2% milk requires further processing to be sold, management estimates a market value of $1.00 per gallon for 2% milk at the split-off point. Using the market value at split-off method, determine the amount of the total joint cost to be allocated to each product.
Nervana Soy Products (NSP) buys soybeans and processes them into other soy products. Each ton of soybeans that NSP purchases for $350 can be converted for an additional $210 into 650 lbs of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.32 and soy oil can be sold in bulk for $4.5 per gallon. NSP can process the 650 pounds of soy meal into 750 pounds of soy cookies at an additional cost of $300. Each pound of soy cookies can be sold for $2.32 per pound. The 100 gallons of soy oil can be packaged at a cost of $230 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for $1.15. Read the requirements. Requirement 1. Allocate the joint cost to the cookies and the Soyola using the (a) Sales value at splitoff method and (b) NRV method. a. First, allocate the joint cost using the Sales value at splitoff method. (Round the weights to three decimal places and joint costs to the nearest dollar.) Sales value of total production at splitoff…
Carondelet Coffee has begun making and selling pastries. The fixed costs of making the pastry are $4,000, and the company estimates that the variable costs are $.75 per pastry. How many pastries does Carondelet have to sell to earn net income of $5,000 if it sells each pastry for $3 apiece?
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Illion Soy Products (ASP) buys soybeans and processes them into other soy products. Each ton of soybeans that ASP purchases for $250 can be converted for an additional $180 into 700 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.08 and soy oil can be sold in bulk for $4 per gallon. ASP can process the 700 pounds of soy meal into 800 pounds of soy cookies at an additional cost of $370. Each pound of soy cookies can be sold for $2.08 per pound. The 80 gallons of soy oil can be packaged at a cost of $200 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.45. Read the requirements. Requirement 1. Allocate the joint cost to the cookies and the Soyola using the (a) Sales value at splitoff method and (b) NRV method. a. First, allocate the joint cost using the Sales value at splitoff method. (Round the weights to three decimal places and joint costs to the nearest dollar.) Sales value of total production at splitoff…
Sunland Company produces face cream. Each bottle of face cream costs $11 to produce and can be sold for $18. The bottles can be sold as is, or processed further into sunscreen with an additional cost of $17 each. Sunland Company could sell the sunscreen bottles for $25 each. Face cream must be processed further because its profit is $8 each. Face cream must not be processed further because it decreases profit by $17 each. Face cream must not be processed further because costs increase more than revenue. Face cream must be processed further because it increases profit by $7 each.
Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each tonne of soy beans that SSP purchases for $280 can be converted for an additional $200 into 550 lbs of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.48, and soy oil can be sold in bulk for $4.75 per gallon. SSP can process the 550 lbs of soy meal into 700 lbs of soy cookies at an additional cost of $380. Each pound of soy cookies can be sold for $2.48 per pound. The 100 gallons of soy oil can be packaged at a cost of $200 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for $1.35. Required 1. Allocate the joint cost to the cookies and the Soyola using: a. Sales value at splitoff method b. NRV method 2. Should the company have processed each of the products further? What effect does the allocation method have on this decision? www Requirement 1a. Allocate the joint cost to the cookies and the Soyola using the sales value at…
Zachary Fruit Drink Company planned to make 202,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 404,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.23. Zachary actually paid $115,385 to purchase 412,090 cups of concentrate, which was used to make 203,000 containers of apple juice. Required: b. Compute the actual price per cup of concentrate. (Round your answer to 2 decimal places.) c. Compute the standard quantity (number of cups of concentrate) required to produce the containers. d. Compute the materials price variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance). Round "Price variance" to 2 decimal places.) e. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance). Round "Usage variance"…
A chocolatier produces and sells boxes of chocolates for which the fixed costs are $300 and the variablecost per box is $4. Each box of chocolate has a selling price of $20. Determine the number of boxes that must besold for the chocolatier to earn a profit of $4500

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