Question Content Area McBride’s Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It also incorporates a processing time weight factor of 1 for the cream and 3 for the skimmed milk. The amount of this cost that will be allocated to cream using the weighted average method is a. $900 b. $1,000 c. $250 d. $100

Question Content Area McBride’s Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It also incorporates a processing time weight factor of 1 for the cream and 3 for the skimmed milk. The amount of this cost that will be allocated to cream using the weighted average method is a. $900 b. $1,000 c. $250 d. $100

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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Joint Cost Allocation—Net Realizable Value Method Lily’s Lemonade Stand makes three types of lemonade: pure, raspberry, and strawberry. The lemonade is produced through a joint mixing process that costs a total of $30 per batch. One batch produces 32 cups of pure lemonade, 21 cups of strawberry lemonade, and 21 cups of raspberry lemonade. After the split-off point, all three lemonades can be sold for $0.80 per cup, but strawberry and raspberry lemonade can be processed further by adding artificial coloring and flavoring and sold for $0.95 and $1.00 per cup, respectively. It is estimated that these additional processing costs are $0.75 and $1.80 per batch for strawberry and raspberry lemonade, respectively. Allocate the joint costs of production to each product using the net realizable value method. Joint Product Allocation Pure lemonade $ Strawberry lemonade Raspberry lemonade Totals $
Question 7.4 The Dairy Company produces three products from a joint processes using whole milk: butter, cheese, and cream. The joint costs amount to $24,000 per batch of output. Each batch totals 50,000 liters: 25% butter, 25% cheese, 50% cream. All products are processed further without gain or loss in volume. Separable costs are butter, $0.50 per liter; cheese, $2.00 per liter; cream, $0.25 per liter. The selling prices per liter are respectively: $3.50, $6.00, $4.00. Required: How much joint cost per batch should be allocated to cream, assuming that joint costs are allocated on a physical measure basis? If joint costs are assigned on a net realizable value basis, how much joint cost should be allocated to cheese? An organic grocer has offered to buy all of the cheese produced at $5.50 per liter. Traditionally 90% of the cheese production is sold. How much better or worse off financially is the company from accepting this offer?
Answer questions 9 and 10
QUESTION 1 Refineries Ltd manufactures sugar, both brown sugar and white sugar. The basic ingredient for both of the sugar products is sugar cane, which costs N$48 per kg. A machine is used to extract the sugar from the sugar cane. The depreciation on the machine amounts to N$1 200 per day, while the machine operator is paid N$200 per day and other conversion costs amount to $10 per kg. The machine can process 10 kg of sugar cane in one day. 1kg of sugar cane is used to produce 10 packets and 8 packets of 1kg brown and white sugar respectively. The selling price per packet amounts to $8 for brown and $12 for white sugar.10 kgs of sugarcane is required to produce 100 packets of brown sugar and 80 packets of white sugar. During the refinery process all visible molasses is removed from the raw sugarcane, after which it is sold to a cattle feeds’ manufacturer, at a price of $5 per kg. 10kgs of raw sugarcane usually have only 0,5kgs of molasses. REQUIRED; A.) Calculate the cost of both…
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Question 2 Use the following standard cost card for 1 gallon of ice cream to answer the questions. STANDARD COST CARD Product: Gallon of Ice Cream Standard Cost Manufacturing Cost Information Standard Cost Quantity per Unit Summary Direct Materials Cream 5 quarts $1.15 per quart $0.08 per ounce $36.00 per hour $5.75 Sugar 16 ounces $1.28 Direct Labor 3 minutes $1.80 Total Direct Costs $8.83 Actual direct costs incurred to make 50 gallons of ice cream: 275 quarts of cream at $1.05 per quart 832 ounces of sugar at $0.075 per ounce 165 minutes of labor at $37 per hour All material used was bought during the current period. C. Compute the material and labor variances. D. Comment on the results and possible causes of the variances.
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Question 4