New Brunswick Soy Products (NBSP) buys soy beans and processes them into other soy products. Each tonne of soybeans that NBSP purchases for $340 can be converted for anadditional $180 into 550lbs of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.36,and soy oil can be sold in bulk for $4.75 per gallon.NBSP can process the 550lbs of soy meal into 700lbs of soy cookies at an additional cost of $310. Each pound of soycookies can be sold for $2.36 per pound. The 100 gallons ofsoy oil can be packaged at a cost of $270 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for $1.15.RequiredAllocate the joint cost to the cookies and the Soyola using:a. Sales value at splitoff methodb. NRV methodShould the company have processed each of the products further? What effect does the allocation method have on thisdecision?

The allocation method affects the amount of joint costs assigned to each product, which in turn…

Answered: New Brunswick Soy Products (NBSP) buys…

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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