Organic Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: Joint cost of production in July 2017 was $100. A special shipment of 75pounds of breasts and 15 pounds of wings has been destroyed in a fire. Organic Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Organic Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Read the requirements2. Requirement 1a. Compute the cost of the special shipment destroyed using the sales value at splitoff method. Complete the table below to assist you. (Round the weighting to three decimal places and the allocated costs per pound to four decimal places. Round all other amounts to the nearest cent.) Breast Wings Thighs Bones Feathers Total Pounds of product 200 50 100 140 10 Wholesale selling price per pound $0.55 $0.30 $0.35 $0.05 $0.10 Sales value at splitoff Weighting: Sales value at splitoff Joint costs allocated Allocated costs per pound (Round your answers to the nearest cent.) The cost of the 75 pounds of breasts is . The cost of the 15 pounds of wings is . Requirement 1b. Compute the cost of the special shipment destroyed using the physical-measure method (pounds of finished product). Complete the table below to assist you. (Round the weighting to three decimal places, the allocated costs per pound to four decimal places, and the joint costs allocated to the nearest cent.) Breasts Wings Thighs Bones Feathers Total Pounds of product 200 50 100 140 10 Weighting: Physical measures Joint costs allocated Allocated costs per pound (Round your answers to the nearest cent.) The cost of the 75 pounds of breasts is . The cost of the 15 pounds of wings is . Requirement 2. What joint-cost-allocation method would you recommend Organic Chicken use? Explain. The (1) method captures the benefits-received criterion of cost allocation and is the preferred method. The costs of processing a chicken are allocated to products in proportion to (2) . Organic Chicken's decision to process chicken is heavily influenced by the (3) . The (4) provide relatively few benefits to Organic Chicken despite their high physical volume. 1: Data Table Parts Pounds of Product Wholesale Selling Price per Pound When Production is Complete Breast 200 $0.55 Wings 50 0.30 Thighs 100 0.35 Bones 140 0.05 Feathers 10 0.10 2: Requirements 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 Organic Chicken use? Explain.
Organic Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: Joint cost of production in July 2017 was $100. A special shipment of 75pounds of breasts and 15 pounds of wings has been destroyed in a fire. Organic Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Organic Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Read the requirements2. Requirement 1a. Compute the cost of the special shipment destroyed using the sales value at splitoff method. Complete the table below to assist you. (Round the weighting to three decimal places and the allocated costs per pound to four decimal places. Round all other amounts to the nearest cent.) Breast Wings Thighs Bones Feathers Total Pounds of product 200 50 100 140 10 Wholesale selling price per pound $0.55 $0.30 $0.35 $0.05 $0.10 Sales value at splitoff Weighting: Sales value at splitoff Joint costs allocated Allocated costs per pound (Round your answers to the nearest cent.) The cost of the 75 pounds of breasts is . The cost of the 15 pounds of wings is . Requirement 1b. Compute the cost of the special shipment destroyed using the physical-measure method (pounds of finished product). Complete the table below to assist you. (Round the weighting to three decimal places, the allocated costs per pound to four decimal places, and the joint costs allocated to the nearest cent.) Breasts Wings Thighs Bones Feathers Total Pounds of product 200 50 100 140 10 Weighting: Physical measures Joint costs allocated Allocated costs per pound (Round your answers to the nearest cent.) The cost of the 75 pounds of breasts is . The cost of the 15 pounds of wings is . Requirement 2. What joint-cost-allocation method would you recommend Organic Chicken use? Explain. The (1) method captures the benefits-received criterion of cost allocation and is the preferred method. The costs of processing a chicken are allocated to products in proportion to (2) . Organic Chicken's decision to process chicken is heavily influenced by the (3) . The (4) provide relatively few benefits to Organic Chicken despite their high physical volume. 1: Data Table Parts Pounds of Product Wholesale Selling Price per Pound When Production is Complete Breast 200 $0.55 Wings 50 0.30 Thighs 100 0.35 Bones 140 0.05 Feathers 10 0.10 2: Requirements 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 Organic Chicken use? Explain.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 4BE: Blakes Blacksmith Co. produces two types of shotguns, a 12-gauge and 20-gauge. The shotguns are made...
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Organic Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows:
Joint cost of production in July 2017 was $100.
A special shipment of 75pounds of breasts and 15 pounds of wings has been destroyed in a fire. Organic Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Organic Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process.
Read the requirements2.
Requirement 1a. Compute the cost of the special shipment destroyed using the sales value at splitoff method.
Complete the table below to assist you. (Round the weighting to three decimal places and the allocated costs per pound to four decimal places. Round all other amounts to the nearest cent.)
|
Breast
|
Wings
|
Thighs
|
Bones
|
Feathers
|
Total
|
Pounds of product
|
200
|
50
|
100
|
140
|
10
|
|
Wholesale selling price
|
|
|
|
|
|
|
per pound
|
$0.55
|
$0.30
|
$0.35
|
$0.05
|
$0.10
|
|
Sales value at splitoff
|
|
|
|
|
|
|
Weighting: Sales value
|
|
|
|
|
|
|
at splitoff
|
|
|
|
|
|
|
Joint costs allocated
|
|
|
|
|
|
|
Allocated costs
|
|
|
|
|
|
|
per pound
|
|
|
|
|
|
|
(Round your answers to the nearest cent.)
The cost of the 75 pounds of breasts is
|
|
. The cost of the 15 pounds of wings is
|
|
.
|
Requirement 1b. Compute the cost of the special shipment destroyed using the physical-measure method (pounds of finished product).
Complete the table below to assist you. (Round the weighting to three decimal places, the allocated costs per pound to four decimal places, and the joint costs allocated to the nearest cent.)
|
Breasts
|
Wings
|
Thighs
|
Bones
|
Feathers
|
Total
|
Pounds of product
|
200
|
50
|
100
|
140
|
10
|
|
Weighting: Physical measures
|
|
|
|
|
|
|
Joint costs allocated
|
|
|
|
|
|
|
Allocated costs per pound
|
|
|
|
|
|
(Round your answers to the nearest cent.)
The cost of the 75 pounds of breasts is
|
|
. The cost of the 15 pounds of wings is
|
|
.
|
Requirement 2. What joint-cost-allocation method would you recommend
Organic Chicken use? Explain.
The (1) method captures the benefits-received criterion of cost allocation and is the preferred method. The costs of processing a chicken are allocated to products in proportion to (2) .
Organic Chicken's decision to process chicken is heavily influenced by the
(3) . The (4) provide relatively few benefits to
Organic Chicken despite their high physical volume.
1: Data Table
Parts
|
Pounds of Product
|
Wholesale Selling Price per Pound When Production is Complete
|
---|---|---|
Breast
|
200
|
$0.55
|
Wings
|
50
|
0.30
|
Thighs
|
100
|
0.35
|
Bones
|
140
|
0.05
|
Feathers
|
10
|
0.10
|
2: Requirements
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
Organic
Chicken use? Explain. |
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VIEWStep 2 1. a) Computation of cost of the special shipment by split off method
VIEWStep 3 1. a) Computation of the cost of the special shipment destroyed
VIEWStep 4 b) Computation of cost of the special shipment by physical measures method
VIEWStep 5 Computation of the cost of the special shipment destroyed
VIEWStep 6 Working note
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