Formulas Home Insert Page Layout Data Review View Special S Joint Costs Special B 11 Joint costs (costs of noodles, spices, and other 12 inputs and processing to splitoff point) Separable costs of processing 9,000 tons of 13 Beef Ramen into 12,000 tons of Special B Separable cost of processing 11,000 tons of 14 Shrimp Ramen into 17,000 tons of Special S $380,000 $36,000 $136,000 15 Beef Shrimp Special S Ramen Ramen Special B 16 17 Beginning inventory (tons) 18 Production (tons) 19 Transfer for further processing (tons) 20 Sales (tons) 21 Selling price per ton 17,000 9,000 9,000 11,000 11,000 12,000 12,000 17,000 15 $ 35 20 47 1. Calculate Tasty's gross-margin percentage for Special B and Special S when joint costs are allocated using the following: a. Sales value at splitoff method b. Physical-measure method c. Net realizable value method 2. Recently, Tasty discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 3,000 tons of stock are produced and can be sold by incurring marketing costs of $11,100. Sabrina Donahue, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $6,754 each month, so it should not be sold. How did Donahue arrive at that final number, and what do you think of her analysis? Should Tasty sell the stock? Required Formulas Home Insert Page Layout Data Review View Special S Joint Costs Special B 11 Joint costs (costs of noodles, spices, and other 12 inputs and processing to splitoff point) Separable costs of processing 9,000 tons of 13 Beef Ramen into 12,000 tons of Special B Separable cost of processing 11,000 tons of 14 Shrimp Ramen into 17,000 tons of Special S $380,000 $36,000 $136,000 15 Beef Shrimp Special S Ramen Ramen Special B 16 17 Beginning inventory (tons) 18 Production (tons) 19 Transfer for further processing (tons) 20 Sales (tons) 21 Selling price per ton 17,000 9,000 9,000 11,000 11,000 12,000 12,000 17,000 15 $ 35 20 47 1. Calculate Tasty's gross-margin percentage for Special B and Special S when joint costs are allocated using the following: a. Sales value at splitoff method b. Physical-measure method c. Net realizable value method 2. Recently, Tasty discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 3,000 tons of stock are produced and can be sold by incurring marketing costs of $11,100. Sabrina Donahue, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $6,754 each month, so it should not be sold. How did Donahue arrive at that final number, and what do you think of her analysis? Should Tasty sell the stock? Required

Formulas Home Insert Page Layout Data Review View Special S Joint Costs Special B 11 Joint costs (costs of noodles, spices, and other 12 inputs and processing to splitoff point) Separable costs of processing 9,000 tons of 13 Beef Ramen into 12,000 tons of Special B Separable cost of processing 11,000 tons of 14 Shrimp Ramen into 17,000 tons of Special S $380,000 $36,000 $136,000 15 Beef Shrimp Special S Ramen Ramen Special B 16 17 Beginning inventory (tons) 18 Production (tons) 19 Transfer for further processing (tons) 20 Sales (tons) 21 Selling price per ton 17,000 9,000 9,000 11,000 11,000 12,000 12,000 17,000 15 $ 35 20 47 1. Calculate Tasty's gross-margin percentage for Special B and Special S when joint costs are allocated using the following: a. Sales value at splitoff method b. Physical-measure method c. Net realizable value method 2. Recently, Tasty discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 3,000 tons of stock are produced and can be sold by incurring marketing costs of $11,100. Sabrina Donahue, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $6,754 each month, so it should not be sold. How did Donahue arrive at that final number, and what do you think of her analysis? Should Tasty sell the stock? Required Formulas Home Insert Page Layout Data Review View Special S Joint Costs Special B 11 Joint costs (costs of noodles, spices, and other 12 inputs and processing to splitoff point) Separable costs of processing 9,000 tons of 13 Beef Ramen into 12,000 tons of Special B Separable cost of processing 11,000 tons of 14 Shrimp Ramen into 17,000 tons of Special S $380,000 $36,000 $136,000 15 Beef Shrimp Special S Ramen Ramen Special B 16 17 Beginning inventory (tons) 18 Production (tons) 19 Transfer for further processing (tons) 20 Sales (tons) 21 Selling price per ton 17,000 9,000 9,000 11,000 11,000 12,000 12,000 17,000 15 $ 35 20 47 1. Calculate Tasty's gross-margin percentage for Special B and Special S when joint costs are allocated using the following: a. Sales value at splitoff method b. Physical-measure method c. Net realizable value method 2. Recently, Tasty discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 3,000 tons of stock are produced and can be sold by incurring marketing costs of $11,100. Sabrina Donahue, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $6,754 each month, so it should not be sold. How did Donahue arrive at that final number, and what do you think of her analysis? Should Tasty sell the stock? Required

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 8CE: Refer to Cornerstone Exercise 7.7. Assume that Orchard Fresh, Inc., uses the weighted average method...

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