It's mind-boggling the number of products that are made with cotton. From salad dressing, to T-shirts, to diapers, to animal seed, the possibilities are practically endless. Here is just one combination of products that could be produced from raw cotton, along with a variety of ways the manufacturer could allocate costs between the products. Let's start with the joint cleaning and separation process, which allows for the cotton seed and the lint to be separately identifiable. The following quantities of cotton seed and lint were produced for a total cost (including the raw cotton and processing costs) of $222,000. 399,000 pounds of cotton seed 301,000 pounds of lint (fiber) Both of these products can be sold at this point, or they can be processed further. In their present state, they're worth: $0.13 per pound for cotton seed $0.75 per pound for lint This particular company presses the cotton seed to make oil and uses the lint to make thread. The additional costs and processes generate higher sales values for the final products, as follows. Seed/Oil Lint/Thread Additional cost $20,000 $83,900 Final sales value $80,000 $317,000 (a) (b) (c) Allocate the joint process costs using the physical quantities method. (Round proportion to 2 decimal places, e.g. 0.25 and final answers to O decimal places, e.g. 5,125.) Seed Share of joint cost $ Lint $
It's mind-boggling the number of products that are made with cotton. From salad dressing, to T-shirts, to diapers, to animal seed, the possibilities are practically endless. Here is just one combination of products that could be produced from raw cotton, along with a variety of ways the manufacturer could allocate costs between the products. Let's start with the joint cleaning and separation process, which allows for the cotton seed and the lint to be separately identifiable. The following quantities of cotton seed and lint were produced for a total cost (including the raw cotton and processing costs) of $222,000. 399,000 pounds of cotton seed 301,000 pounds of lint (fiber) Both of these products can be sold at this point, or they can be processed further. In their present state, they're worth: $0.13 per pound for cotton seed $0.75 per pound for lint This particular company presses the cotton seed to make oil and uses the lint to make thread. The additional costs and processes generate higher sales values for the final products, as follows. Seed/Oil Lint/Thread Additional cost $20,000 $83,900 Final sales value $80,000 $317,000 (a) (b) (c) Allocate the joint process costs using the physical quantities method. (Round proportion to 2 decimal places, e.g. 0.25 and final answers to O decimal places, e.g. 5,125.) Seed Share of joint cost $ Lint $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:It's mind-boggling the number of products that are made with cotton. From salad dressing, to T-shirts, to diapers, to
animal seed, the possibilities are practically endless. Here is just one combination of products that could be produced
from raw cotton, along with a variety of ways the manufacturer could allocate costs between the products.
Let's start with the joint cleaning and separation process, which allows for the cotton seed and the lint to be separately
identifiable. The following quantities of cotton seed and lint were produced for a total cost (including the raw cotton
and processing costs) of $222,000.
399,000 pounds of cotton seed
301,000 pounds of lint (fiber)
Both of these products can be sold at this point, or they can be processed further. In their present state, they're worth:
$0.13 per pound for cotton seed
$0.75 per pound for lint
This particular company presses the cotton seed to make oil and uses the lint to make thread. The additional costs and
processes generate higher sales values for the final products, as follows.
Seed/Oil
Lint/Thread
Additional cost
$20,000
$83,900
Final sales value $80,000
$317,000
(a)
(b)
(c)
Allocate the joint process costs using the physical quantities method. (Round proportion to 2 decimal places,
e.g. 0.25 and final answers to O decimal places, e.g. 5,125.)
Seed
Share of joint cost $
Lint
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education