What would be the amount of the joint costs allocated to Cake Flour using the constant gross-margin percentage NRV method?
Question 10
SW Flour Company buys whole wheat flour and mills it into Bread Flour and All-Purpose White Flour (APWF). SW bought 300,000 pounds of whole wheat flour for $70,000. SW spent an additional $50,000 to process the whole wheat flour into Bread Flour and All-Purpose White Flour, so total joint costs equal $120,000. SW Flour Company reported the following production and sales information:
Bread Flour APWF
Production and sales (in pounds) 60,000 240,000
Selling price per pound $0.85 $0.50
SW can also put the All-Purpose White Flour through a second process and convert it into Cake Flour. This
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