17-21 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 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 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 splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
17-21 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 2020 follows: Parts Wholesale Selling Price per Pound When Pounds of Product Breasts 100 Wings 20 Thighs 40 Bones 80 Feathers 10 Production Is Complete $0.55 0.20 0.35 0.10 0.05 Joint cost of production in July 2020 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 splitoff point is assumed to be at the end of the production process. Required 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![17-21
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 2020 follows:
Parts
Wholesale Selling Price per Pound When
Pounds of Product
Breasts
100
Wings
20
Thighs
40
Bones
80
Feathers
10
Production Is Complete
$0.55
0.20
0.35
0.10
0.05
Joint cost of production in July 2020 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 splitoff point is assumed to be at the end of the production process.
Required
1. Compute the cost of the special shipment destroyed using the following:
a. Sales value at splitoff method
b. Physical-measure method (pounds of finished product)
2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15d62a17-cc35-4521-abad-4eaf1d0b4948%2Fd3d3adbe-2151-4476-a47a-fa0cc9150e39%2F0vnc34_processed.jpeg&w=3840&q=75)
Transcribed Image Text:17-21
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 2020 follows:
Parts
Wholesale Selling Price per Pound When
Pounds of Product
Breasts
100
Wings
20
Thighs
40
Bones
80
Feathers
10
Production Is Complete
$0.55
0.20
0.35
0.10
0.05
Joint cost of production in July 2020 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 splitoff point is assumed to be at the end of the production process.
Required
1. Compute the cost of the special shipment destroyed using the following:
a. Sales value at splitoff method
b. Physical-measure method (pounds of finished product)
2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.
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