Reference no: EM132595941

Jackson Flocks Inc. processes Turkeys into four products for sale on the wholesale market:

Breasts

Smoked legs and thighs

Whole Turkeys

Necks and wings for soup

The costs to get the products to the point where they can be separately identified total $10,000,000. Additional Information follows:

Product                   Lbs. Produced              Cost after split-off              Selling price per pound

Breasts                      1,000,000                             $200,000                      $2

Smoked legs and thighs   2,500,000                            500,000                          4

Whole Turkeys                 2,000,000                            425,000                           3

Necks and wings                   500,000                           350,000                            5

Feathers are sold at the split-off point as a by-product for $1,000,000 which lower the joint costs allocated.

Based on the information given for Jackson Flocks:

Question 1: allocate the joint processing costs to the four products using:

1. Sales value at split-off method
2. Physical-measure method (volume in units)
3. NRV method

Question 2: Prepare an analysis for Jackson Flocks that compares processing the smoked legs and thighs further, as it currently does, with selling them as a product immediately at split-off.

Question 3: Assume Jackson flocks announced that in six months it will sell the legs and thighs at split-off due to increasing competitive pressure. Identify at least three types of likely behavior that will be demonstrated by the skilled labor in the brining and smoking process as a result of this announcement. Include in your discussion how this behavior could be influenced by management.