Question
In: Accounting
Ochre processes tomatoes into tomato sauce, tomato paste, and tomato puree. As part of the cost...
Ochre processes tomatoes into tomato sauce, tomato paste, and tomato puree. As part of the cost planning and cost control of operations and activities, the company is currently reviewing the gross-margin percentage of each of its products, using the estimated net realisable value (NRV) method for allocating joint costs. The company processes tomatoes in Department #1, out of which come three products: tomato sauce, tomato paste, and tomato puree. Processing 750,000 kg in Department #1 results in 50,000 kg of tomato sauce, 300,000 kg of tomato paste and 100,000 kg of tomato puree, and the costs in Department #1 are $500,000 in total. Tomato paste is sold without further processing. Tomato sauce is processed further through Department #2 and the costs are $50,000. Tomato puree is considered a by-product and is processed further through Department #3 and the costs are $50,000. Tomato sauce sells for $4 per kg. Tomato paste sells for $2 per kg. Tomato puree sells for $3 per kg.
Required
a) Calculate the gross-margin percentage of each product using unit costs per kilogram for tomato sauce, tomato paste, and tomato puree, treating tomato puree as a by-product. Deduct the estimated NRV of the by-product produced from the joint cost of tomato sauce and tomato paste.
b) Calculate the gross-margin percentage of each product using unit costs per kilogram for tomato sauce, tomato paste, and tomato puree, treating all three as joint products.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Ochre processes tomatoes into tomato sauce, tomato paste, and tomato puree. As part of the cost...
Ochre processes tomatoes into tomato sauce, tomato paste, and
tomato puree. As part of the cost planning and cost control of
operations and activities, the company is currently reviewing the
gross-margin percentage of each of its products, using the
estimated net realisable value (NRV) method for allocating joint
costs. The company processes tomatoes in Department #1, out of
which come three products: tomato sauce, tomato paste, and tomato
puree. Processing 750,000 kg in Department #1 results in 50,000 kg
of...
Ochre processes tomatoes into tomato sauce, tomato paste, and tomato puree. As part of the cost...
Ochre processes tomatoes into tomato sauce, tomato paste, and
tomato puree. As part of the cost planning and cost control of
operations and activities, the company is currently reviewing the
gross-margin percentage of each of its products, using the
estimated net realisable value (NRV) method for allocating joint
costs. The company processes tomatoes in Department #1, out of
which come three products: tomato sauce, tomato paste, and tomato
puree. Processing 750,000 kg in Department #1 results in 50,000 kg
of...
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Red Sauce Canning Company processes tomatoes into catsup, tomato
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Product
Production
(# of cases)
Sales
(# of cases)
Sales Value at Splitoff Point
Separable Costs
Final Selling Price
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100,000
80,000
$6 per case
$3.00 per case
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another he used organic fertilizer, and the third he used a
chemical fertilizer. He wants to see if there is a difference in
the mean weights of tomatoes from the different fields. The sample
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Tomato weights and Fertilizer: Carl the farmer has three fields of tomatoes, on one he used...
Tomato weights and Fertilizer: Carl the farmer
has three fields of tomatoes, on one he used no fertilizer, in
another he used organic fertilizer, and the third he used a
chemical fertilizer. He wants to see if there is a difference in
the mean weights of tomatoes from the different fields. The sample
data is given below. The second table gives the results from an
ANOVA test. Carl claims there is a difference in the mean weight
for all tomatoes...
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Tomato weights and Fertilizer (Raw Data, Software Required): Carl the farmer has three fields of tomatoes,...
Tomato weights and Fertilizer (Raw Data, Software
Required):
Carl the farmer has three fields of tomatoes, on one he used no
fertilizer, in another he used organic fertilizer, and the third he
used a chemical fertilizer. He wants to see if there is a
difference in the mean weights of tomatoes from the different
fields. The sample data for tomato-weights in grams is given below.
Carl claims there is a difference in the mean weight for all
tomatoes between the...
Tomato weights and Fertilizer (Raw Data, SOFTWARE REQUIRED): Carl the farmer has three fields of tomatoes,...
Tomato weights and Fertilizer (Raw Data, SOFTWARE
REQUIRED):
Carl the farmer has three fields of tomatoes, on one he used no
fertilizer, in another he used organic fertilizer, and the third he
used a chemical fertilizer. He wants to see if there is a
difference in the mean weights of tomatoes from the different
fields. The sample data for tomato-weights in grams is given below.
Carl claims there is a difference in the mean weight for all
tomatoes between the...
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