Question
In: Accounting
Allocating Joint Costs Using the Sales-Value-at-Split-Off Method Orchard Fresh, Inc., purchases apples from local orchards and...
Allocating Joint Costs Using the Sales-Value-at-Split-Off Method
Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning.
Information on a recent purchase of 20,000 pounds of apples is as follows: Assume that Orchard Fresh, Inc., uses the sales-value-at-split-off method of joint cost allocation and has provided the following information about the four grades of apples:
| Grades | Pounds | Price at Split-Off (per lb.) |
| Grade A | 1,600 | $4.00 |
| Grade B | 5,000 | 1.00 |
| Slices | 8,000 | 0.50 |
| Applesauce | 5,400 | 0.10 |
| Total | 20,000 |
Total joint cost is $15,000.
Required:
1. Allocate the joint cost to the four grades of apples using the sales-value-at-split-off method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
| Joint Cost | |
| Grades | Allocation |
| Grade A | $___________ |
| Grade B | $___________ |
| Slices | $___________ |
| Applesauce | $___________ |
| Total | $___________ |
2. What if the price at split-off of Grade B apples increased to $1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of cost to the remaining grades? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
| Joint Cost | |
| Grades | Allocation |
| Grade A | $___________ |
| Grade B | $___________ |
| Slices | $___________ |
| Applesauce | $___________ |
| Total | $___________ |
Solutions
Expert Solution
| Part-1 = Comutation of Joint Cost per Pound ( As per Sale Value at Split Off Point ) | ||||||||
| Product Produced |
Unit in Pound (a) |
SP/Pound (b) |
Sales Value at Split Off
Point (c=aXb) |
Allocation percentage (d=(c/15940) |
Joint Cost (e ) |
Joint cost Allocated (f=d*e) |
||
| Grade-A | 1600 | $4.00 | $6,400.00 | 40.1506% | 15000 | $6,023 | ||
| Grade B | 5000 | $1.00 | $5,000.00 | 31.3676% | 15000 | $4,705 | ||
| Slice | 8000 | $0.50 | $4,000.00 | 25.0941% | 15000 | $3,764 | ||
| Applesauce | 5400 | $0.10 | $540.00 | 3.3877% | 15000 | $508 | ||
| total | 20000 | 15940 | $15,000.00 | |||||
| Part-1 = Comutation of Joint Cost per Pound ( As per Sale Value at Split Off Point ) | ||||||||
| Product Produced |
Unit in Pound (a) |
SP/Pound (b) |
Sales Value at Split Off
Point (c=aXb) |
Allocation percentage (d=(c/15940) |
Joint Cost (e ) |
Joint cost Allocated (f=d*e) |
||
| Grade-A | 1600 | $4.00 | $6,400.00 | 37.7804% | 15000 | $5,667 | ||
| Grade B | 5000 | $1.20 | $6,000.00 | 35.4191% | 15000 | $5,313 | ||
| Slice | 8000 | $0.50 | $4,000.00 | 23.6128% | 15000 | $3,542 | ||
| Applesauce | 5400 | $0.10 | $540.00 | 3.1877% | 15000 | $478 | ||
| total | 20000 | 16940 | $15,000.00 |
ekkarill92 answered 1 year agoRelated Solutions
Allocating Joint Costs Using the Sales-Value-at-Split-Off Method Orchard Fresh, Inc., purchases apples from local orchards and...
Allocating Joint Costs Using the Sales-Value-at-Split-Off Method
Orchard Fresh, Inc., purchases apples from local orchards and sorts
them into four categories. Grade A are large blemish-free apples
that can be sold to gourmet fruit sellers. Grade B apples are
smaller and may be slightly out of proportion. These are packed in
boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples for...
Allocating Joint Costs Using the Weighted Average Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs Using the Weighted Average Method
Orchard Fresh, Inc., purchases apples from local orchards and
sorts them into four categories. Grade A are large blemish-free
apples that can be sold to gourmet fruit sellers. Grade B apples
are smaller and may be slightly out of proportion. These are packed
in boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples...
Allocating Joint Costs Using the Weighted Average Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs Using the Weighted Average Method
Orchard Fresh, Inc., purchases apples from local orchards and
sorts them into four categories. Grade A are large blemish-free
apples that can be sold to gourmet fruit sellers. Grade B apples
are smaller and may be slightly out of proportion. These are packed
in boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples...
Allocating Joint Costs Using the Physical Units Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs Using the Physical Units Method
Orchard Fresh, Inc., purchases apples from local orchards and
sorts them into four categories. Grade A are large blemish-free
apples that can be sold to gourmet fruit sellers. Grade B apples
are smaller and may be slightly out of proportion. These are packed
in boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples...
Allocating Joint Costs Using the Physical Units Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs
Using the Physical Units Method
Orchard Fresh, Inc.,
purchases apples from local orchards and sorts them into four
categories. Grade A are large blemish-free apples that can be sold
to gourmet fruit sellers. Grade B apples are smaller and may be
slightly out of proportion. These are packed in boxes and sold to
grocery stores. Apples for slices are even smaller than Grade B
apples and have blemishes. Apples for applesauce are of lower grade
than apples...
Allocating Joint Costs Using the Physical Units Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs Using the Physical Units Method
Orchard Fresh, Inc., purchases apples from local orchards and
sorts them into four categories. Grade A are large blemish-free
apples that can be sold to gourmet fruit sellers. Grade B apples
are smaller and may be slightly out of proportion. These are packed
in boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples...
Allocating Joint Costs Using the Physical Units Method Orchard Fresh, Inc., purchases apples from local orchards...
Allocating Joint Costs Using the Physical Units Method
Orchard Fresh, Inc., purchases apples from local orchards and
sorts them into four categories. Grade A are large blemish-free
apples that can be sold to gourmet fruit sellers. Grade B apples
are smaller and may be slightly out of proportion. These are packed
in boxes and sold to grocery stores. Apples for slices are even
smaller than Grade B apples and have blemishes. Apples for
applesauce are of lower grade than apples...
7.26 Sales-Value-at-Split-off Method Allocate the joint costs using the sales-value-at-split-off method. Alomar Company manufactures four products...
7.26 Sales-Value-at-Split-off Method
Allocate the joint costs using the sales-value-at-split-off
method.
Alomar Company manufactures four products from a joint
production process: barlon, selene, plicene, and corsol. The joint
costs for one batch are as follows:
Direct materials $67,900
Direct labor 34,000
Overhead 25,500
At the split-off point, a batch yields 1,400 barlon, 2,600
selene, 2,500 plicene, and 3,500 corsol. All products are sold at
the split-off point: barlon sells for $15 per unit, selene sells
for $20 per unit, plicene...
Computing Joint Costs—Sales Value at Split-Off and Net Realizable Value Methods LeMoyne Manufacturing Inc.’s joint cost...
Computing Joint Costs—Sales Value at Split-Off and Net
Realizable Value Methods LeMoyne Manufacturing Inc.’s joint cost of
producing 2,000 units of Product X, 1,000 units of Product Y, and
1,000 units of Product Z is $50,000. The unit sales values of the
three products at the split-off point are Product X–$30, Product
Y–$100, and Product Z–$90. Ending inventories include 200 units of
Product X, 300 units of Product Y, and 100 units of Product Z. In
your interim calculations, round...
Exercise 6-14 Computing Joint Costs—Sales Value at Split-Off and Net Realizable Value Methods LeMoyne Manufacturing Inc.’s...
Exercise 6-14
Computing Joint Costs—Sales Value at Split-Off and Net Realizable
Value Methods
LeMoyne Manufacturing Inc.’s joint cost of producing 2,000 units
of Product X, 1,000 units of Product Y, and 1,000 units of Product
Z is $50,000. The unit sales values of the three products at the
split-off point are Product X–$30, Product Y–$100, and Product
Z–$90. Ending inventories include 200 units of Product X, 300 units
of Product Y, and 100 units of Product Z. In your interim...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
ADVERTISEMENT