Reference no: EM132661468

As vegetable processor that purchases vegetables from local farmers. The majority of its processing capacity is devoted to broccoli. A typical month of processing consists of buying 10,000 kilograms of broccoli at a cost of $0.55 per kilogram.

The broccoli then goes through the following processes:

Cutting $ 7,000

Sorting 2,500

Cleaning 14,000

Total $ 23,500

Product yields and average selling price per kilogram are as follows:

Fresh broccoli crowns

KG. Selling price Additional processing Yield (Tetra Paks) Selling price per Tetra Pak

6,000 $2.85

Frozen broccoli

KG. Selling price Additional processing Yield (Tetra Paks) Selling price per Tetra Pak

2,500 $2.10

Grade B broccoli

KG.        Selling price          Additional processing Yield (Tetra Paks)            Selling price per Tetra Pak

1,000        $5,500                      3,000                                                            $4.80

Total KG (6000+2500+1000) = 9,500

1. 500 kg of the purchased product is waste and cannot be sold.
2. Grade B broccoli is made into broccoli soup and sold in Tetra Paks.
3. The cost of this additional processing is $5,500, and each package can be sold for $4.80.

Problem 1: Using the net realizable method, how much of the joint costs should be allocated to the broccoli soup?