Swagger Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two Intermedlate products-peels and depeeled spuds. The peels can then be processed further to make a cocktall of organic nutrlents. And the depeeled spuds can be processed further to make frozen french fries. A batch of potatoes costs $40 to buy from farmers and $10 to peel In the company's plant. The peels produced from a batch can be sold as Is for anlmal feed for $22 or processed further for $15 to make the cocktall of nutrlents that are sold for $42. The depeeled spuds can be sold as Is for $33 or processed further for $22 to make frozen french fries that are sold for $54. Required: a. Assuming that no other costs are Involved in processing potatoes or In selling products, how much money does the company make from processlng one batch of potatoes Into the cocktall of organic nutrlents and frozen french fries? b. Should each of the Intermedlate products, peels and depeeled spuds, be sold as Is or processed further Into an end product?

Swagger Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two Intermedlate products-peels and depeeled spuds. The peels can then be processed further to make a cocktall of organic nutrlents. And the depeeled spuds can be processed further to make frozen french fries. A batch of potatoes costs $40 to buy from farmers and $10 to peel In the company's plant. The peels produced from a batch can be sold as Is for anlmal feed for $22 or processed further for $15 to make the cocktall of nutrlents that are sold for $42. The depeeled spuds can be sold as Is for $33 or processed further for $22 to make frozen french fries that are sold for $54. Required: a. Assuming that no other costs are Involved in processing potatoes or In selling products, how much money does the company make from processlng one batch of potatoes Into the cocktall of organic nutrlents and frozen french fries? b. Should each of the Intermedlate products, peels and depeeled spuds, be sold as Is or processed further Into an end product?

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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Swagger Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two intermediate products-peels and depeeled spuds. The peels can then be processed further to make a cocktail of organic nutrients. And the depeeled spuds can be processed further to make frozen french fries. A batch of potatoes costs $44 to buy from farmers and $12 to peel in the company's plant. The peels produced from a batch can be sold as is for animal feed for $26 or processed further for $17 to make the cocktail of nutrients that are sold for $46. The depeeled spuds can be sold as is for $37 or processed further for $26 to make frozen french fries that are sold for $58. Required: a. Assuming that no other costs are involved in processing potatoes or in selling products, how much money does the company make from processing one batch of potatoes into the cocktail of organic nutrients and frozen french fries? b. Should each of the intermediate products, peels and depeeled spuds, be sold…
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Sugar beets are batch-processed at Kosakowski Corporation. Farmers charge $66 for a batch of sugar beets, and the company's facility charges $17 to crush them. Beet fibre and juice, two intermediate products, are produced during the crushing process. The beet fibre may be sold for $23 if it is sold as is, or it can be processed further for $13 to produce industrial fibre, which can be sold for $36. The price of the beet juice is $42, or it can be processed further for $20 to create refined sugar, which is then sold for $84. How much more money does the business make (lose) while processing one batch of sugar beets into refined sugar and industrial fibre?a. $22b. ($18)c. ($116)d. $4
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Owly Corporation’s agriculture division currently produces their own soil mix to grow the plants they sell in. Owly currently makes 200,000 cubic meters of soil mix a year. Each cubic meter of soil mix has direct labour costs of $1.50, direct material costs of $3.15, variable overhead costs of $0.75, and fixed overhead costs of $0.70 for a total cost of $6.10 per cubic meter. An outside supplier has offered to sell Owly soil mix for $5.75 per cubic meter. If Owly purchases the soil mix, 25% of the fixed manufacturing overhead will be eliminated, the remaining 75% will still exist.A. What is the net dollar advantage (disadvantage) of purchasing the soil mix rather than making it?B. What is the maximum amount Owly is willing to pay an outside supplier per cubic meter (to the cent) for the soil mix if the supplier commits to supplying all 200,000 cubic meters?C. After one month of greenhouse growing time Owly can produce 100,000 four inch pot basil plants that can be sold for $2.20 each.…
Kosakowski Corporation processes sugar beets in batches. A batch of sugar beets costs $66 to buy from farmers and $17 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $23 or processed further for $13 to make the end product industrial fiber that is sold for $36. The beet juice can be sold as is for $42 or processed further for $20 to make the end product refined sugar that is sold for $84. How much more profit (loss) does the company make by processing one batch of sugar beets into the end products industrial fiber and refined sugar? Select one: a. $22 b. ($18) c. ($116) d. $4
McKenzie’s Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process that costs $30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000 bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-off point. Each product is processed further after the split-off point, but the market value of a bottle of any of the flavors at this point is estimated to be $1.25 per bottle. The additional processing costs of morning glory, snowflake sparkle, and sea breeze hand soap are $0.50, $0.55, and $0.60 per bottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for $2.00, $2.20, and $2.40 per bottle, respectively.Instructions1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Explain why McKenzie’s Soap Sensations, Inc.,…
McKenzie’s Soap Sensations, Inc., produces hand soaps with three different scents: morning glory, snowflake sparkle, and sea breeze. The soap is produced through a joint production process that costs $30,000 per batch. Each batch produces 14,800 bottles of morning glory hand soap, 12,000 bottles of snowflake sparkle hand soap, and 10,000 bottles of sea breeze hand soap at the split-off point. Each product is processed further after the split-off point, but the market value of a bottle of any of the flavors at this point is estimated to be $1.25 per bottle. The additional processing costs of morning glory, snowflake sparkle, and sea breeze hand soap are $0.50, $0.55, and $0.60 per bottle, respectively. Morning glory, snowflake sparkle, and sea breeze hand soap are then sold for $2.00, $2.20, and $2.40 per bottle, respectively. 1. Using the net realizable value method, allocate the joint costs of production to each product. 2. Using the Market Value at Split Off Point Method, allocate…