Joint-cost allocation, insurance settlement. Quality Chicken grows and processes chickens. Each chicken is disassembled into five...

Joint-cost allocation, insurance settlement. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: Parts Pounds of Product wholesale selling price per pound Breasts 100 .55 Wings 20 .20 Thighs 40 .35 Bones 80 .10 Feathers 10 .05 Joint cost of production in July 2017 was $50. A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken’s insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The split off point is assumed to be at the end of the production process. 1) Compute the cost of the special shipment destroyed using the following: a) Sales value at split off method b) Physical-measure method (pounds of finished product) 2) What joint-cost-allocation method would you recommend Quality Chicken use? Explain.

Expert Solution

ekkarill92 answered 2 years ago

16-21 Joint-cost allocation, insurance settlement. Quality Chicken grows and processes chickens. Each chicken is disassembled into...

16-21 Joint-cost allocation, insurance settlement. Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: Parts Pounds of Product Wholesale Selling Price per pound When production is Complete Breasts 100 $0.55 Wings 20 $0.20 Thighs 40 $0.35 Bones 80 $0.10 Feathers 10 $0.05 Joint Cost of Production in July 2017 $50: A special shipment of 40 pounds of breasts and 15 pounds of wings has been...

Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Quality Chicken...

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Harper Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and...

Harper Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 12,000 pounds of raw chicken that costs $7,000, the company produces two parts: 2,800 pounds of drumsticks and 4,200 pounds of breast for a processing cost of $2,450. The chicken breast is further processed into 3,200 pounds of steak for a processing cost of $2,000. The market price...

Stuart Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and...

Stuart Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 17,000 pounds of raw chicken that costs $9,250, the company produces two parts: 3,400 pounds of drumsticks and 5,700 pounds of breast for a processing cost of $6,502. The chicken breast is further processed into 4,900 pounds of steak for a processing cost of $2,900. The market price...

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Rooney Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 16,000 pounds of raw chicken that costs $8,950, the company produces two parts: 3,000 pounds of drumsticks and 4,800 pounds of breast for a processing cost of $4,085. The chicken breast is further processed into 4,000 pounds of steak for a processing cost of $2,700. The market price...

SOLVE FOR C-2 Munoz Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens...

SOLVE FOR C-2 Munoz Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 16,000 pounds of raw chicken that costs $8,500, the company produces two parts: 2,400 pounds of drumsticks and 5,200 pounds of breast for a processing cost of $4,748. The chicken breast is further processed into 4,400 pounds of steak for a processing cost of $2,400....

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The best method of joint cost allocation is the physical units method because it recognizes the relative value of each product produced. True False

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