Sh.112. Innerva Soy Products (MSP) buys soybeans and processes them into other soy products. Each ton of soybeans that MSPpurchases for $250 can be converted for an additional $200 into 575 lbs of soy meal and 80 gallons of soy oil. A pound of soymeal can be sold at splitoff for $1.28 and soy oil can be sold in bulk for $4.25 per gallon.MSP can process the 575 pounds of soy meal into 725 pounds of soy cookies at an additional cost of $360. Each pound of soycookies can be sold for $2.28 per pound. The 80 gallons of soy oil can be packaged at a cost of $230 and made into 320 quartsof Soyola. Each quart of Soyola can be sold for $1.35.Requirements1. Allocate the joint cost to the cookies and the Soyola using the following:a. Sales value at splitoff methodb. NRV method2. Should MSP have processed each of the products further? What effect doesthe allocation method have on this decision?Requirement 1. Allocate the joint cost to the cookies and the Soyola using the (a) Sales value at splitoff method and (b) NRVmethod.a. First, allocate the joint cost using the Sales value at splitoff method. (Round the weights to three decimal places and joint coststo the nearest dollar.)Sales value of total production at splitoffWeightingJoint costs allocatedCookies/Soy MealSoyola/Soy OilTotal

Under process costing it is possible that two different products come out from the same process, for…

Innerva Soy Products (MSP) buys soybeans and processes them into other soy products. Each ton of soybeans that MSP purchases for $250 can be converted for an additional $200 into 575 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.28 and soy oil can be sold in bulk for $4.25 per gallon. MSP can process the 575 pounds of soy meal into 725 pounds of soy cookies at an additional cost of $360. Each pound of soy cookies can be sold for $2.28 per pound. The 80 gallons of soy oil can be packaged at a cost of $230 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.35.

Innerva Soy Products (MSP) buys soybeans and processes them into other soy products. Each ton of soybeans that MSP purchases for $250 can be converted for an additional $200 into 575 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.28 and soy oil can be sold in bulk for $4.25 per gallon. MSP can process the 575 pounds of soy meal into 725 pounds of soy cookies at an additional cost of $360. Each pound of soy cookies can be sold for $2.28 per pound. The 80 gallons of soy oil can be packaged at a cost of $230 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.35.

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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