Question

Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $19.50 per pound and the flakes for $14.60 per pound. On average, 100 pounds of lobster are processed into 62 pounds of tails and 27 pounds of flakes, with 11 pounds of waste. Assume that the company purchased 3,500 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $7,300. No materials or labor costs are assigned to the waste. If 2,033 pounds of tails and 865 pounds of flakes are sold, calculate the allocated cost of the sold items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. (Round your answers to nearest whole number. Round cost per pound answers to 2 decimal places.)

Answer is complete but not entirely correct.

Yield per 3,500 lb. purchase Market Value per 3,500 lb. purchase Percent of Market Value Cost to be allocated Allocated cost 3,500 pound purchase Cost per pound Numerator Denominator % of Mkt Value Lobster Tails 2,170selected answer correct $42,315selected answer correct $42,315selected answer correct $56,112selected answer correct 75.41 $21,300selected answer correct $16,062selected answer correct $7.40selected answer correct Lobster Flakes 945selected answer correct 13,797selected answer correct 13,797selected answer correct 56,112 24.59 $21,300 $5,238 $5.54selected answer correct Totals $56,112 100 $21,300 1) What is the allocated cost of the sold items? Cost per pound Pounds sold Cost of Goods Sold Lobster Tails $7.40 2,033selected answer correct $15,044selected answer correct Lobster Flakes $5.54 865selected answer correct 4,792selected answer correct Totals $19,836 2) What is the allocated cost of the ending inventory? Cost per pound Pounds in ending inventory Cost of Ending Inventory Lobster Tails $7.40 Lobster Flakes $5.54 Totals

Answer 1

	Yield per 3,500 lb. Purchase	Market Value per 3,500 lb. Purchase	Percent of Market Value			Cost to be Allocated	Allocated Cost 3,500 Pound Purchase	Cost per Pound
			Numerator	Denominator	% of Mkt Value
Lobster Tails	2,170	$42,315	$42,315	$56,112	75%	21300	$16,063	$7.40
Lobster Flakes	945	$13,797	$13,797	$56,112	25%	21300	$5,237	$5.54
Totals		$56,112			100%		$21,300
1) What is the allocated cost of the sold items?
	Cost per Pound	Pounds sold	Cost of Goods Sold
Lobster Tails	$7.40	2,033	$15,049
Lobster Flakes	$5.54	865	$4,794
Totals			$19,843
2) What is the allocated cost of the ending inventory?
	Cost per Pound	Pounds in Ending Inventory	Cost of Ending Inventory
Lobster Tails	$7.40	137	$1,014
Lobster Flakes	$5.54	80	$443
Totals			$1,457
	2170-2033=137
	945-865=40
	3500/100*62=2170
	3500/100*27=945
	2170*19.5=42351;945*14.6=13797