COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Chapter 16, Problem 16.22E
Joint products and byproducts (continuation of 16-21). Quality Chicken is computing the ending inventory values for its July 31, 2017, balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs, 5 pounds of bones, and 2 pounds of feathers.
Quality Chicken’s management wants to use the sales value at splitoff method. However, management wants you to explore the effect on ending inventory values of classifying one or more products as a byproduct rather than a joint product.
- 1. Assume Quality Chicken classifies all five products as joint products. What are the ending inventory values of each product on July 31, 2017?
Required
- 2. Assume Quality Chicken uses the production method of accounting for byproducts. What are the ending inventory values for each joint product on July 31, 2017, assuming breasts and thighs are the joint products and wings, bones, and feathers are byproducts?
- 3. Comment on differences in the results in requirements 1 and 2.
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Students have asked these similar questions
Joint products and byproducts(continuation of 16-21). Quality chicken is computing the ending inventory values for its july31,2017,balance sheet. Ending inventory amounts on July 31 are 15 pounds of breasts, 4 pounds of wings, 6 pounds of thighs,5 pounds of bones and 2 pounds of feathers.
Quality Chicken’s management wants to use the sales value at splitoff method. However, management wants you to explore the effect of ending inventory value of classifying one or more products as a byproduct rather than a joint product.
Hammond Company adopted LIFO when it was formed on January 1, 2017. Since then, the company has had the following purchases and sales of its single inventory item:
Year
Units Purchased
Cost per Unit
Units Sold
Price per Unit
2017
10,000
$5
8,000
$12
2018
12,000
6
9,000
13
2019
15,000
8
14,000
16
In December 2020, the controller realized that because of an unexpected increase in demand, the company had sold 22,000 units but had purchased only 19,000 units during the year. In 2020, each unit had been sold for $19, and each unit purchased had cost $10. The income tax rate is 21%.
Required:
1. If Hammond makes no additional purchases in 2020, how much LIFO liquidation profit will it report?
$fill in the blank 7a6026fb6f8f01d_1
2. Prepare the appropriate annual report disclosures for 2020.
2020
2019
Inventory at FIFO
$fill in the blank b2a8b8fedfc6fff_1
$fill in the blank b2a8b8fedfc6fff_2
Less: LIFO valuation…
On January 4, 2015, the president of the company, Connie Kilmer, asked for your advice on costing the32,000-unit physical inventory that was taken on December 31, 2014.Moreover, since the firm plans to expand its product line, she asked for your advice on the use of a perpetual inventory system in the future.
1. Determine the cost of December 31, 2014, inventory under the periodic system, using the (a) first-in, first-out method, (b) last-in, first-out method, and (c) weighted average cost method.
2. Determine the gross profit for the year under each of the three methods in (1).3. a. Explain varying viewpoints why each of the three inventory costing methods may best reflect the results of operations for 2014.b. Which of the three inventory costing methods may best reflect the replacement cost of the inventory on the balance sheet as of December 31, 2014?c. Which inventory costing method would you choose to use for income tax purposes? Why?
Chapter 16 Solutions
COST ACCOUNTING
Ch. 16 - Give two examples of industries in which joint...Ch. 16 - What is a joint cost? What is a separable cost?Ch. 16 - Distinguish between a joint product and a...Ch. 16 - Why might the number of products in a joint-cost...Ch. 16 - Provide three reasons for allocating joint costs...Ch. 16 - Why does the sales value at splitoff method use...Ch. 16 - Prob. 16.7QCh. 16 - Distinguish between the sales value at splitoff...Ch. 16 - Give two limitations of the physical-measure...Ch. 16 - How might a company simplify its use of the NRV...
Ch. 16 - Why is the constant gross-margin percentage NRV...Ch. 16 - Managers must decide whether a product should be...Ch. 16 - Prob. 16.13QCh. 16 - Describe two major methods to account for...Ch. 16 - Why might managers seeking a monthly bonus based...Ch. 16 - Prob. 16.16MCQCh. 16 - Joint costs of 8,000 are incurred to process X and...Ch. 16 - Houston Corporation has two products, Astros and...Ch. 16 - Dallas Company produces joint products, TomL and...Ch. 16 - Earls Hurricane Lamp Oil Company produces both A-1...Ch. 16 - Joint-cost allocation, insurance settlement....Ch. 16 - Joint products and byproducts (continuation of...Ch. 16 - Net realizable value method. Sweeney Company is...Ch. 16 - Alternative joint-cost-allocation methods,...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Prob. 16.26ECh. 16 - Joint-cost allocation, sales value, physical...Ch. 16 - Joint-cost allocation: Sell immediately or process...Ch. 16 - Accounting for a main product and a byproduct....Ch. 16 - Joint costs and decision making. Jack Bibby is a...Ch. 16 - Joint costs and byproducts. (W. Crum adapted)...Ch. 16 - Methods of joint-cost allocation, ending...Ch. 16 - Alternative methods of joint-cost allocation,...Ch. 16 - Comparison of alternative joint-cost-allocation...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Joint-cost allocation. SW Flour Company buys 1...Ch. 16 - Further processing decision (continuation of...Ch. 16 - Joint-cost allocation with a byproduct. The...Ch. 16 - Byproduct-costing journal entries (continuation of...Ch. 16 - Joint-cost allocation, process further or sell....Ch. 16 - Prob. 16.41PCh. 16 - Prob. 16.42PCh. 16 - Methods of joint-cost allocation, comprehensive....
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