Question

InventiveInventive

Soy Products

​(Upper KK​SP)

buys soybeans and processes them into other soy products. Each ton of soybeans that

Upper KKSP

purchases for

$ 250$250

can be converted for an additional

$ 210$210

into

700700

lbs of soy meal and

100100

gallons of soy oil. A pound of soy meal can be sold at splitoff for

$ 1.04$1.04

and soy oil can be sold in bulk for

$ 4$4

per gallon.

Upper KKSP

can process the

700700

pounds of soy meal into

800800

pounds of soy cookies at an additional cost of

$ 330$330.

Each pound of soy cookies can be sold for

$ 2.04$2.04

per pound. The

100100

gallons of soy oil can be packaged at a cost of

$ 200$200

and made into

400400

quarts of Soyola. Each quart of Soyola can be sold for

$ 1.35$1.35.

Read the requirements

LOADING...

.

Requirement 1. Allocate the joint cost to the cookies and the Soyola using the​ (a) Sales value at splitoff method and​ (b) NRV method.

a.​ First, allocate the joint cost using the Sales value at splitoff method. ​(Round the weights to three decimal places and joint costs to the nearest​ dollar.)

	Cookies/	Soyola/
	Soy Meal	Soy Oil	Total
Sales value of total production at splitoff
Weighting
Joint costs allocated

Answer 1

1.

Sales value at splitoff method
	Soy cookies/Soy meal	Soyola/Soy oil	Total
Sales value of total production at splitoff,
700*1.04 ; 100*4	728.00	400.00	1,128.00
Weighting	0.645	0.355
Joint Allocation	297.00	163.00	460.00

2.

Net realizable value method
	Soy cookies	Soyola	Total
Final sales value of total production
700*2.04 ; 400*1.35	1,428.00	540.00	1,968.00
Deduct separable costs	330.00	200.00	530.00
Net realizable value	1,098.00	340.00	1,438.00
Weighting	0.764	0.236
Joint Allocation	351	109	460.00