Question

In: Accounting

Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer...

Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 2018, the joint costs of processing the tomatoes were $420,000. There was no beginning inventory for the summer. Production and sales information for the summer is as follows:

Product

Production

(# of cases)

Sales

(# of cases)

Sales Value at Splitoff Point

Separable Costs

Final Selling Price

Catsup

100,000

80,000

$6 per case

$3.00 per case

Catsup Premium    $23 per case

Juice

150,000

120,000

8 per case

5.00 per case

Juice Premium        $25 per case

Canned

200,000

150,000

5 per case

2.50 per case

Canned Premium    $7.5 per case

a. Determine the amount allocated to each product if the estimated net realizable value (NRV) method is used.

b. Compute the cost per case for each product.

c. Complete the following product-line partial income statement for each product (excel template is provided).

Product-line Income Statement by using NRV method

Catsup

Juice

Canned

Revenues

Cost of goods sold

     Joint costs

     Separable costs

     Production costs

     Deduct ending inventory

          Cost of goods sold

Gross margin

Gross margin percentage

Solutions

Expert Solution

Answer is given below


Related 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...
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...
Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce, fresh berries, and...
Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce, fresh berries, and sweetened dried cranberries, with production and processing facilities in St. Catherine. Sales of traditional products such as fresh berries and canned cranberry sauce have been declining for a long time; the fastest-growing products have been juices and dried fruit, especially “light” and sugar-free juices. Industry-sponsored advertising has highlighted research showing that cranberries are rich in antioxidants and other phytonutrients that may protect against heart...
Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce, fresh berries, and...
Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce, fresh berries, and sweetened dried cranberries, with production and processing facilities in St. Catherine. Sales of traditional products such as fresh berries and canned cranberry sauce have been declining for a long time; the fastest-growing products have been juices and dried fruit, especially “light” and sugar-free juices. Industry-sponsored advertising has highlighted research showing that cranberries are rich in antioxidants and other phytonutrients that may protect against heart...
BOND VALUATION FINANCE Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce,...
BOND VALUATION FINANCE Grace Kennedy Limited is a leading producer of cranberry juice, canned cranberry sauce, fresh berries, and sweetened dried cranberries, with production and processing facilities in St. Catherine. Sales of traditional products such as fresh berries and canned cranberry sauce have been declining for a long time; the fastest-growing products have been juices and dried fruit, especially “light” and sugar-free juices. Industry-sponsored advertising has highlighted research showing that cranberries are rich in antioxidants and other phytonutrients that may...
The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are...
The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $50,400​, net fixed assets of $248,500​, current liabilities of $30,800​, and​ long-term debt of $99,100. a.  Calculate​ Caraway's stockholders' equity. b. What is the​ firm's net working​ capital? c.  If​ Caraway's current liabilities consist of $20,100 in accounts payable and $10,700 in​...
you landed a summer internship with a company that processes dental insurance claims for insurance companies....
you landed a summer internship with a company that processes dental insurance claims for insurance companies. The company receives the insurance claims from dental offices, achieves authorization from the correct insurance company, and sends payment checks. You do not deal with dental customers directly; instead, you work with insurance companies on one side and dental offices on the other. After two months with the company, you think a number of frauds may be occurring, and you feel the best way...
An employee of a small software company in Minneapolis bikes to work during the summer months....
An employee of a small software company in Minneapolis bikes to work during the summer months. He can travel to work using one of three routes and wonders whether the average commute times (in minutes) differ between the three routes. He obtains the following data after traveling each route for one week. Route 1 32 34 37 32 26 Route 2 23 22 30 20 24 Route 3 20 27 25 25 27 Click here for the Excel Data File...
An employee of a small software company in Minneapolis bikes to work during the summer months....
An employee of a small software company in Minneapolis bikes to work during the summer months. He can travel to work using one of three routes and wonders whether the average commute times (in minutes) differ between the three routes. He obtains the following data after traveling each route for one week. Route 1 30 26 34 34 32 Route 2 23 22 28 25 20 Route 3 27 29 24 30 27 Construct an ANOVA table. (Round intermediate calculations...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT