Wildhorse & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases largecrates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separatelyidentifiable. Wildhorse currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghettisauce. The specifics on each of these products for one month are as follows.Joint processing costsQuantity of tomato juice producedValue of tomato juiceQuantity of tomato puree producedAdditional cost to make spaghetti sauceFinal sales value of spaghetti sauce$160,0006,000 gallons$2 per gallon14,000 pounds$19,000$182,000

Below is an expression.Explanation:To allocate the joint processing costs between the tomato juice,…

Answered: Wildhorse & Sons produces tomato juice…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

(GGI) manufactures lawn fertilizer. Because of the product’s very high quality, GGI often receives special orders from agricultural research. For each type of fertilizer sold, each bag is carefully filled to have the precise mix of components advertised for that type of fertilizer. GGI’s operating capacity is 26,000 one-hundred-pound bags per month, and it currently is selling 24,000 bags manufactured in 24 batches of 1,000 bags each. The firm just received a request for a special order of 7,000 one-hundred-pound bags of fertilizer for $150,000 from APAC, a research organization. The production costs would be the same, but there would be no variable selling costs. Delivery and other packaging and distribution services would cause a one-time $2,500 cost for GGI. The special order would be processed in two batches of 3,500 bags each. (No incremental batch-level costs are anticipated. Most of the batch-level costs in this case are short-term fixed costs, such as salaries and…
McKinney's Sweet Shop specializes in homemade candies and ice cream. McKinney's produces its ice cream in house, in batches of 50 pounds. The first stage in ice cream making is the blending of ingredients to obtain a mix, which meets pre-specified requirements on the percentages of certain constituents of the mix. The desired composition is as follows: Constituent 1. Fat 2. Serum Solids 3. Sugar Solids 4. Egg Solids 5. Stabilizer 6. Emulsifier 7. Water Required Percentage (%) 18.00 8.00 14.00 0.35 0.25 0.15 59.25 The mix can be composed of ingredients from the following list: Ingredient Cost ($/lb) 1. 40% Cream 1.13 2. 23% Cream 3. Butter 4. Plastic Cream 5. Butter Oil 0.70 2.30 2.30 2.85 6. 4% Milk 0.25 7. Skim Condensed Milk 0.42 8. Skim Milk Powder 0.65 9. Liquid Sugar 0.31 10. Sugared Frozen Fresh Egg Yolk 1.75 11. Powdered Egg Yolk 4.52 2.45 12. Stabilizer 13. Emulsifier 14. Water 1.53 0.00 The number of pounds of a constituent found in a pound of an ingredient is shown below (the…
Green Grow Incorporated (GGI) manufactures lawn fertilizer. Because of the product’s very high quality, GGI often receives special orders from agricultural research groups. For each type of fertilizer sold, each bag is carefully filled to have the precise mix of components advertised for that type of fertilizer. GGI’s operating capacity is 22,000 one-hundred-pound bags per month, and it currently is selling 20,000 bags manufactured in 20 batches of 1,000 bags each. The firm just received a request for a special order of 5,000 one-hundred-pound bags of fertilizer for $130,000 from APAC, a research organization. The production costs would be the same, but there would be no variable selling costs. Delivery and other packaging and distribution services would cause a one-time $2,500 cost for GGI. The special order would be processed in two batches of 2,500 bags each. (No incremental batch-level costs are anticipated. Most of the batch-level costs in this case are short-term fixed costs,…
Old Country Links, Incorporated, produces sausages in three production departments—Mixing, Casing and Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed with spices. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted-average method in its process costing system. Data for September for the Casing and Curing Department follow: Units Percent Completed Mixing Materials Conversion Work in process inventory, September 1 1 100% 60% 50% Work in process inventory, September 30 1 100% 20% 10% Mixing Materials Conversion Work in process inventory, September 1 $ 2,325 $ 70 $ 137 Cost added during September $ 275,435 $ 28,882 $ 138,966 Mixing cost represents the costs of the…
SophCO Inc. is a distributor of linseed oil which is used in the manufacture of paint. The companybuys linseed oil in bulk from a number of different linseed crushing plants. At the beginning ofmonth of September the company had 25,000 gallons of linseed oil stored in its tank farm. Thelinseed oil was purchased from one crushing plant at a cost of $3.00. During the month ofSeptember the company purchased additional linseed oil and sold linseed oil as follows.9/3/XX purchased 10,000 gallons of linseed oil at $3.25 per gallon.9/8/XX purchased 15,000 gallons of linseed oil at $3.50 per gallon9/10/XX purchased 5,000 gallons of linseed oil at $3.60 per gallon.9/11/XX sold 22,000 gallons to a paint manufacture for $5.00 per gallon.9/12/XX purchased 20,000 gallons of linseed oil at $3.75 per gallon.9/22/XX purchased 5,000 gallons of linseed oil at $3.80 per gallon.9/30/XX sold 28,000 gallons of linseed oil for $5.20.Required:a. Complete the perpetual inventory record (provided) for the above…
Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used regularly for 45 days, will grow hair in bald spots (with varying degrees of success). Timothy calls his lotion Hair-Again and is selling it via the telephone and Internet. His major form of marketing is through 15-minute infomercials and Internet advertising. Timothy sells each 16-ounce bottle of Hair-Again for $15 and pays a commission of 3 percent of sales to telephone operators who field the 1-800 phone calls from potential customers. Fixed marketing expenses for each quarter of the coming year include: Internet banner ads $7,600 Telephone operator time 5,000 Travel 3,000 In addition, early next year Timothy intends to film and show infomercials on television. He expects the cost to be $12,000 in quarters 1 and 2, and that the cost will rise to $24,000 in each of quarters 3 and 4. Timothy expects the following unit sales of Hair-Again: Quarter 1 5,000 Quarter 2 15,000…
McKenzie’s Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process that costs $30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000 bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-off point. Each product is processed further after the split-off point, but the market value of a bottle of any of the flavors at this point is estimated to be $1.25 per bottle. The additional processing costs of morning glory, snowflake sparkle, and sea breeze hand soap are $0.50, $0.55, and $0.60 per bottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for $2.00, $2.20, and $2.40 per bottle, respectively.Instructions1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Explain why McKenzie’s Soap Sensations, Inc.,…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. If Garden were to use the constant…
Zanda Drug Corporation buys three chemicals that are processed to produce two types ofanalgesics used as ingredients for popular over-the-counter drugs. The purchased chemicalsare blended for 2 to 3 hours and then heated for 15 minutes. The results of the process aretwo separate analgesics, depryl and pencol, which are sent to a drying room until their moisture content is reduced to 6 to 8%. For every 1,300 pounds of chemicals used, 600 pounds ofdepryl and 600 pounds of pencol are produced. After drying, depryl and pencol are sold tocompanies that process them into their final form. The selling prices are $12 per pound fordepryl and $30 per pound for pencol. The costs to produce 600 pounds of each analgesic areas follows:Chemicals $8,500Direct labor 6,735Overhead 9,900The analgesics are packaged in 20-pound bags and shipped. The cost of each bag is $1.30.Shipping costs $0.10 per pound.Zanda could process depryl further by grinding it into a fine powder and then molding thepowder into…
McKenzie’s Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process that costs $30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000 bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-off point. Each product is processed further after the split-off point, but the market value of a bottle of any of the flavors at this point is estimated to be $1.25 per bottle. The additional processing costs of morning glory, snowflake sparkle, and sea breeze hand soap are $0.50, $0.55, and $0.60 per bottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for $2.00, $2.20, and $2.40 per bottle, respectively. 1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Using the Market Value at Split Off Point Method, allocate…
Sherwin Pogi produces a drink extract that passes through three processes: mixing, blending and bottling. During the 3rd quarter of the year, the blending department received 20,000 gallons of liquid from the Cooking Department with costs of Php 192,000. Upon receiving the liquid, the Blending Department adds sugar and stirs the mixture for twenty minutes. The product is then passed on to the Bottling Department. There were 4,000 gallons in process at the beginning of the quarter, 75% converted with the following costs: Prior Dept. costs, Php 38,000; Powder, Php 5,360; conversion costs, Php 12,000. Costs added by the Blending Department during the quarter were: Powder, Php 28,0003; Conversion costs, Php 60,788. There were 3,500 gallons in ending inventory, 20% converted. Using FIFO Method, the conversion cost per EUP is: O a Php 4.74 Php 234 Php 9,20 d. Php 14.34
Old Country Links, Incorporated, produces sausages in three production departments-Mixing, Casing and Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed with spices. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted- average method in its process costing system. Data for September for the Casing and Curing Department follow: Percent Completed Work in process inventory, September 1 Work in process inventory, September 30 Work in process inventory, September 1 Cost added during September Units 5 5 Mixing $ 13,240 $ 291,680 Mixing Materials Conversion 100% 60% 50% 100% 20% 10% Materials $ 25 $ 21,035 Conversion $ 4,005 $ 202,200 Mixing cost represents the costs of the spiced meat mixture transferred…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS