Q2 Joint cost allocation: sell immediately or process further. Iowa Soy Products (ISP) buys soy beans and processes them into other soy products. Each ton of soy beans that ISP purchases for $300 can be converted for an additional $200 (joint cost) into 500 pounds of soy meal and 100 gallons of soy oil. 1 ton = 2000 pound A pound of soy meal can be sold at split off for $1 and soy oil can be sold in bulk for $4 per gallon. ISP can process the 500 pounds of soy meal into 600 pounds of soy cookies at an additional cost of $300. Each pound of soy cookies can be sold for $2 per pound. The 100 gallons of soy oil can be packaged at a cost of $200 and sold for $12.5 per gallons. Required 1. Allocate the joint cost to the cookies and the soy oil using the following: a. Sales value at split off method b. NRV method

Q2 Joint cost allocation: sell immediately or process further. Iowa Soy Products (ISP) buys soy beans and processes them into other soy products. Each ton of soy beans that ISP purchases for $300 can be converted for an additional $200 (joint cost) into 500 pounds of soy meal and 100 gallons of soy oil. 1 ton = 2000 pound A pound of soy meal can be sold at split off for $1 and soy oil can be sold in bulk for $4 per gallon. ISP can process the 500 pounds of soy meal into 600 pounds of soy cookies at an additional cost of $300. Each pound of soy cookies can be sold for $2 per pound. The 100 gallons of soy oil can be packaged at a cost of $200 and sold for $12.5 per gallons. Required 1. Allocate the joint cost to the cookies and the soy oil using the following: a. Sales value at split off method b. NRV method

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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