Reference no: EM132758260
Question: You should submit only an Excel file in good formcanned applesapple pie filling with your solutions.
The Apples'rUs Company processes apples up to the splitoff point where two main products emerge: and . Joint product costs total $110,000. The following information was also collected for the month:
Product Pounds Produced & Sold Selling Price per pound
Canned Apples 25,000 pounds $10.00 per pound
Apple Pie Filling 75,000 pounds $4.00 per pound
The process also produces 10,000 pounds of apple cores and seeds that are blended and sold to a pig farmer for $1 per pound. Apples'rUs uses the production method for accounting for by-products. There are no beginning and ending inventory balances (i.e., all units produced are sold).
Additionally, canned apples may be processed further to yield 20,000 pounds of baby food for an additional processing cost of $200,000. The baby food can be sold for $30 per pound. Apple pie filling can be processed further to yield 70,000 pounds of apple breakfast bars for an additional processing cost of $250,000. The breakfast bars can be sold for $5 per pound.
Required: (a) Physical Measures Method: What amount of joint processing costs is allocated to each product based on pounds produced?
(b) Sales Value Method: What amount of joint processing cost is allocated to each product based on sales value at splitoff?
(c) NRV Method: What amount of joint processing cost is allocated to each product based on the estimated NRV Method?
(d) Make a text box in your Excel worksheet and concisely discuss which allocation method you suggest Apples'RUs use and why.
(e) Sell at Splitoff versus Process Further Decisions: Should management process both products beyond the split-off point?
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