Gibson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from far them into two different products: chicken drumsticks and chicken steak. From a standard batch of 15,000 pounc costs $8,200, the company produces two parts: 2,000 pounds of drumsticks and 5,000 pounds of breast for a p $3,887. The chicken breast is further processed into 4,200 pounds of steak for a processing cost of $2,200. The drumsticks per pound is $1.65 and the market price per pound of chicken steak is $4.2o. If Gibson decided to se instead of chicken steak, the price per pound would be $2.40. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a:? Calculate the gross profit for each nroduct

Gibson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from far them into two different products: chicken drumsticks and chicken steak. From a standard batch of 15,000 pounc costs $8,200, the company produces two parts: 2,000 pounds of drumsticks and 5,000 pounds of breast for a p $3,887. The chicken breast is further processed into 4,200 pounds of steak for a processing cost of $2,200. The drumsticks per pound is $1.65 and the market price per pound of chicken steak is $4.2o. If Gibson decided to se instead of chicken steak, the price per pound would be $2.40. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a:? Calculate the gross profit for each nroduct

Name: Problem 4-24A (Algo) Allocating joint product cost LO 4-4Gibson Chick
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Description: Problem 4-24A (Algo) Allocating joint product cost LO 4-4Gibson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processesthem into two different products: chicken drumsticks and chicken s

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter26: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 26.19EX: Process activity analysis The Brite Beverage Company hollies soft drinks into aluminum cans. The...

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Process activity analysis The Brite Beverage Company hollies soft drinks into aluminum cans. The manufacturing process consists of three activities: 1. Mixing: water, sugar, and beverage concentrate are mixed. 2. Filling: mixed (leverage is filled into 12-oz. cans. 3. Packaging: properly filled cans are boxed into cardboard fridge packs." The activity costs associated with these activities for the period are as follows: Mixing 216,000 Filling 168,000 Packaging 96,000 Total 480,000 The activity costs do not include materials costs, which are ignored for this anal) sis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or kicked," from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans. This proce.ss begins by mixing and filling 6,300,000 cans during the period, of which only 6,000,000 cans are actually packaged. Three hundred thousand cans are rejected due to underweight kicks. A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 300,000 cans to 63,000 cans, thus increasing the number of filled cans to 6,237,000 [6,000,000 + (300,000 63,000)]. A. Determine the total activity cost per packaged can under present operations. B. Determine the amount of increased packaging activity costs from the expected improvements. C. Determine the expected total activity cost per packaged can after improvements. (Round to three decimal places.)
Process activity analysis The Brite Beverage Company hollies soft drinks into aluminum cans. The manufacturing process consists of three activities: 1. Mixing: water, sugar, and beverage concentrate are mixed. 2. Filling: mixed (leverage is filled into 12-oz. cans. 3. Packaging: properly filled cans are boxed into cardboard fridge packs." The activity costs associated with these activities for the period are as follows: Mixing 216,000 Filling 168,000 Packaging 96,000 Total 480,000 The activity costs do not include materials costs, which are ignored for this anal) sis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or kicked," from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans. This proce.ss begins by mixing and filling 6,300,000 cans during the period, of which only 6,000,000 cans are actually packaged. Three hundred thousand cans are rejected due to underweight kicks. A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 300,000 cans to 63,000 cans, thus increasing the number of filled cans to 6,237,000 [6,000,000 + (300,000 63,000)]. A. Determine the total activity cost per packaged can under present operations. B. Determine the amount of increased packaging activity costs from the expected improvements. C. Determine the expected total activity cost per packaged can after improvements. (Round to three decimal places.)
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