The Rich and Creamy Edibles Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate liquor base. These two intermediate products become separately identifiable at a single split off point. Production and sales data are as follows (no beginning inventory): Production Sales Selling Price Separable Costs Chocolate powder 31,280 lbs. 6,800 lbs. $8/lb. $46,035 Milk chocolate 50,600 lbs. 14,400 lbs. $9/lb. $55,085 Costs of processing cocoa beans to split off point: $70,000 Rich and Creamy Edibles Factory fully processes both of its intermediate products into chocolate powder and milk chocolate. Rich and Creamy Edibles Factory sell the chocolate-powder liquor base for $21/gallon and the milk-chocolate liquor base for $28/gallon. What would be the cost per pound of chocolate powder and cost per pound for milk chocolate under the constant gross-margin percentage NRV method, respectively?
The Rich and Creamy Edibles Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate liquor base. These two intermediate products become separately identifiable at a single split off point.
Production and sales data are as follows (no beginning inventory):
Production Sales Selling Price Separable Costs
Chocolate powder 31,280 lbs. 6,800 lbs. $8/lb. $46,035
Milk chocolate 50,600 lbs. 14,400 lbs. $9/lb. $55,085
Costs of processing cocoa beans to split off point: $70,000
Rich and Creamy Edibles Factory fully processes both of its intermediate products into chocolate powder and milk chocolate. Rich and Creamy Edibles Factory sell the chocolate-powder liquor base for $21/gallon and the milk-chocolate liquor base for $28/gallon.
What would be the cost per pound of chocolate powder and cost per pound for milk chocolate under the constant gross-margin percentage NRV method, respectively?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
