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Question - ABC Inc. grows chickens. Parts Kilos Selling Produced Price / KL Breasts 100 $5.50Wings 20 $2.00 Each chicken is disassembled in four parts. Information relating to the month of May is as follows:
Thighs 50 $6.60
Bones 80 $1.00
The joint cost of production in May was $800.
A shipment of 45 kilograms of breast and 15 kilograms of wings has been destroyed in a fire. The insurance company will reimburse the cost of the destroyed items. The insurance company allows ABC Inc. to use a joint allocation method. The split-off point is at the end of the production process.
Required -
1. Find the cost of the destroyed items using the physical-measure method?
2. Find the cost of the destroyed items using the sales value at split-off method?
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