Financial and Managerial Accounting
Financial and Managerial Accounting
7th Edition
ISBN: 9781259726705
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 22, Problem 22E

1.

To determine

To compute: Allocation of cost sold tails and flakes.

1.

Expert Solution
Check Mark

Explanation of Solution

Sold items:

Tails:

Given,
Total value of tails sold is $23,016.
Total values of tails and flakes are $33,600.
Total cost is $12,600.

Formula to allocate cost to the sold tails,

    Cost allocated to sold tails= Total value of tails sold Total value of tails and flakes ×Total cost

Substitute $23,016 for total value of sold tails, $33,600 for total value of tails and flakes and $12,600 for total cost in the above equation.

    Cost allocated to sold tails= $23,016 $33,600 ×$12,600 =$8,631

Hence, cost allocated to sold tails is $8,631.

Working notes:

Calculation for total cost,

    Total cost=Purchase cost+Labor cost =$10,800+$1,800 =$12,600

Calculation for purchase cost,

    Purchase cost=Number of pounds lobster purchase×Rate per pound =2,400×$4.50 =$10,800

Calculation for total value of tails sold,

    Total value of tails sold=Total tails sold×Rate of each tale =1,096×$21 =$23,016

Calculation of total tails processed,

    Totaltailsprocessed=Total weight of lobster×Tails percentage of total weight =2,400× 52 100 =1,248

Calculation of total value of tails,

    Totalvalue of tails=Total tails processed×Value of each pound =1,248×$21 =$26,208

Calculation of total flakes processed,

    Totalflakesprocessed=Total weight of lobster×Flakes percentage of total weight =2,400× 22 100 =528

Calculation of total value of flakes,

    Totalvalue of flakes=Total flakes processed×Value of each pound =528×$14 =$7,392

Calculation of total value of tails and flakes,

    Totalvalue of tails and flakes=Total tails processed+Total flakes processed =$26,208+$7,392 =$33,600

Flakes:

Given,
Total value of flakes sold is $4,536.
Total values of tails and flakes are $33,600.
Total cost is $12,600.

Formula to allocate cost to the sold flakes,

    Cost allocated to sold flakes= Total value of flakes sold Total value of tails and flakes ×Total cost

Substitute, $4.536 for total value of sold flakes, $33,600 for total value of tails and flakes and $12,600 for total cost in the above equation.

    Cost allocated to sold flakes= $4,536 $33,600 ×$12,600 =$1,701

Hence, cost allocated to sold tails is $1,701.

Working notes:

Calculation for total value of flakes sold,

    Total value of flakes sold=Total flakes sold×Rate of each flakes =324×$14 =$4,536

2.

To determine

To compute: Allocation of cost ending inventory of tails and flakes.

2.

Expert Solution
Check Mark

Explanation of Solution

Ending inventory:

Tails:

Given,
Total value of ending inventory of tails is $3,092.
Total values of tails and flakes are $33,600.
Total cost is $12,600.

Formula to allocate cost to ending inventory of tails,

    Cost allocated= Total value of ending inventory of tails Total value of tails and flakes ×Total cost

Substitute $3,092 for total value of ending inventory of tails, $33,600 for total value of tails and flakes and $12,600 for total cost in the above equation.

    Cost allocated= $3,192 $33,600 ×$12,600 =$1,197

Hence, cost allocated to ending inventory of tails is $$1,197.

Working notes:

Calculation for total value of ending inventory,

    Total value of ending inventory=Weight of ending inventory×Value of each pound =152×$21 =$3,092

Calculation for weight of ending inventory,

    Weight of ending inventory=Total tails processedTotal tails sold =1,2481,096 =152

Flakes:

Given,
Total value of ending inventory of flakes is $2,856.
Total values of tails and flakes are $33,600.
Total cost is $12,600.

Formula to allocate cost to ending inventory of flakes,

    Cost allocated= Total value of ending inventory of flakes Total value of tails and flakes ×Total cost

Substitute $2,856 for total value of ending inventory of flakes, $33,600 for total value of tails and flakes and $12,600 for total cost in the above equation.

    Cost allocated= $2,856 $33,600 ×$12,600 =$1,071

Hence, cost allocated to ending inventory of flakes is $1,701.

Working note:

Calculation for total value of ending inventory,

    Total value of ending inventory=( Weight of ending inventory ×Value of each pound ) =204×$14 =$2,856

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Chapter 22 Solutions

Financial and Managerial Accounting

Ch. 22 - Prob. 6DQCh. 22 - Prob. 7DQCh. 22 - Prob. 8DQCh. 22 - Prob. 9DQCh. 22 - Prob. 10DQCh. 22 - Prob. 11DQCh. 22 - Prob. 12DQCh. 22 - Prob. 13DQCh. 22 - Prob. 14DQCh. 22 - Prob. 15DQCh. 22 - Prob. 16DQCh. 22 - Prob. 17DQCh. 22 - Prob. 18DQCh. 22 - Prob. 19DQCh. 22 - Prob. 20DQCh. 22 - Allocation and measurement terms C1 In each blank...Ch. 22 - Prob. 2QSCh. 22 - Prob. 3QSCh. 22 - Prob. 4QSCh. 22 - Prob. 5QSCh. 22 - Prob. 6QSCh. 22 - Prob. 7QSCh. 22 - Prob. 8QSCh. 22 - Prob. 9QSCh. 22 - Computing return on investment A1 Compute return...Ch. 22 - Computing residual income A1 Refer to the...Ch. 22 - Prob. 12QSCh. 22 - Computing profit margin and investment turnover A2...Ch. 22 - Performance measures__balanced scorecard A3...Ch. 22 - Prob. 15QSCh. 22 - Prob. 16QSCh. 22 - Prob. 17QSCh. 22 - Prob. 18QSCh. 22 - Prob. 19QSCh. 22 - Prob. 20QSCh. 22 - Prob. 1ECh. 22 - Prob. 2ECh. 22 - Prob. 3ECh. 22 - Prob. 4ECh. 22 - Prob. 5ECh. 22 - Prob. 6ECh. 22 - Prob. 7ECh. 22 - Prob. 8ECh. 22 - Prob. 9ECh. 22 - Prob. 10ECh. 22 - Prob. 11ECh. 22 - Prob. 12ECh. 22 - Prob. 13ECh. 22 - Prob. 14ECh. 22 - Prob. 15ECh. 22 - Exercise 22-16 Performance measures-balanced...Ch. 22 - Prob. 17ECh. 22 - Prob. 18ECh. 22 - Prob. 19ECh. 22 - Prob. 20ECh. 22 - Prob. 21ECh. 22 - Prob. 22ECh. 22 - Prob. 23ECh. 22 - Prob. 1PSACh. 22 - Prob. 2PSACh. 22 - Prob. 3PSACh. 22 - Prob. 4PSACh. 22 - Prob. 5PSACh. 22 - Prob. 1PSBCh. 22 - Prob. 2PSBCh. 22 - Prob. 3PSBCh. 22 - Prob. 4PSBCh. 22 - Prob. 5PSBCh. 22 - Santana Rey’s two departments, computer consulting...Ch. 22 - Prob. 1BTNCh. 22 - Prob. 2BTNCh. 22 - Prob. 3BTNCh. 22 - Prob. 4BTNCh. 22 - Prob. 5BTNCh. 22 - Prob. 6BTNCh. 22 - Prob. 7BTNCh. 22 - Prob. 8BTNCh. 22 - Prob. 9BTN
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