Sheffield & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Sheffield currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce $160,000 5,000 gallons $3 per gallon pounds 16,000 $11,000 $194,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Sheffield & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The
company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point
the juice and the pulp are separately identifiable. Sheffield currently processes the pulp further to transform it into
his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one
month are as follows.
Joint processing costs
Quantity of tomato juice produced
Value of tomato juice
Quantity of tomato puree produced
Additional cost to make spaghetti sauce
Final sales value of spaghetti sauce
$160,000
5,000
$3
16,000
$11,000
$194,000
gallons
per gallon
pounds
Transcribed Image Text:Sheffield & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Sheffield currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce $160,000 5,000 $3 16,000 $11,000 $194,000 gallons per gallon pounds
(C)
Your answer is partially correct.
Assuming that Sheffield could otherwise sell the tomato puree as-is for $156,000 (instead of turning it into
spaghetti sauce), would you recommend that he process both of these products past the split-off point? Show
how much better or worse off Sheffield would be if the puree and the juice are both processed further.
Net benefit
Juice
eTextbook and Media
20400
Sheffield & Sons is therefore better off by a total $
products beyond the split-off point.
Puree
27000
47400 by processing both
Assistance Used
Transcribed Image Text:(C) Your answer is partially correct. Assuming that Sheffield could otherwise sell the tomato puree as-is for $156,000 (instead of turning it into spaghetti sauce), would you recommend that he process both of these products past the split-off point? Show how much better or worse off Sheffield would be if the puree and the juice are both processed further. Net benefit Juice eTextbook and Media 20400 Sheffield & Sons is therefore better off by a total $ products beyond the split-off point. Puree 27000 47400 by processing both Assistance Used
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