ACCT 344 Week 5 Homework

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ACCT 344 Week 5 Homework,

ACCT 344 Week 5 Homework

  1. Question: Bubble Corporation manufactures two products, I and II, from a joint process. A single production costs $4,000 and results in 100 units of I and 400 units of II. To be ready for sale, both products must be processed further, incurring separable costs of $1 per unit for I and $2 per unit for II. The market price for Product I is $20 and for Product II is $15.

    Required:

    a. Allocate joint production costs to each product using the physical units method.

    b. Allocate joint production costs to each product using the net realizable value method.

    c. Allocate joint production costs to each product using the constant gross margin percentage method.

    2. Question: Mike’s Meats incurs costs of $4,000 while processing raw chicken meat into three products: breasts, wings, and thighs. The meat is then sold to local grocery stores based on the following……………..

    Required: (Calculate relative quantity to three decimal points.)

    a. Determine the cost and gross profit percentage for each type of chicken using the physical units method of joint cost allocation.

    b. Repeat part (a) using the sales-value-at-split-off method of joint cost allocation.

    c. The company has an opportunity to sell wings to local restaurants for $1.00 per pound but additional packaging is required, which will cost $300 per 1,000 lb. Assuming the physical unit method is used to allocate joint costs, should the offer be accepted?

Description

ACCT 344 Week 5 Homework,

Part A: Part A: Product I = 100 ÷ (100 + 400) * $4,000 = $800 Product II = 400 ÷ (500) * $4,000 = $3,200 Product I ($800) + Product II ($3,200) = $4,000 Part B: Income Statement: Product I Product II Total Sales $2,000 $6,000 $8,000 Cost of Goods Sold $800 $3,200 $4,000 Gross………

 

 

Part A: Total Cost: $4,000.00 Breast: 3,000 Units, 50% of Total Units, $2.00 per Pound Wings: 1,000 Units, 16.667% of Total Units, $0.50 per Pound Thighs: 2,000 Units, 33.333% of Total Units, $1.00 per Pound Total Units: 6,000, Combined Price $3.50 per Pound Cost Sale Gross Profit Gross Profit Percentage Breast $2,000.000 $6,000.00 $4,000.000 66.667% Wings $666.667 $500.00 $(166.667) -33.333% Thighs $1,333.333 $2,000.00 $666.667 33.333% Work: Breasts Cost = $4,000*.50 = $2,000 Breasts Sale = 3000 Units * $2.00 per Unit = $6,000 Breasts Gross Profit = $6,000 – $2,000 = $4,000 Breasts Gross Profit Percentage = $4,000 ÷ $6,000 = 66.667% Wings Cost = $4,000*.16667 = $666.667 Wings Sale = 1,000 Units * $0.50 per Unit = $500 Wings Gross Profit = $500 – $666.667 = -$166.667 Wings Gross Profit Percentage = -$166.667 ÷ $500 = -33.333% Thighs Cost = $4,000*.33.333 = $1,333.333 Thighs Sale = 2000 Units * $1.00 per Unit = $2,000 Thighs Gross Profic. The decision to accept the offer is not affected by the allocation of joint costs, only the relevant revenues and costs after split-off. Because the relevant revenue from further processing is 25

c. The decision to accept the offer is not affected by the allocation of joint costs, only the relevant revenues and costs after split-off. Because the relevant revenue from further processing is 25

c. The decision to accept the offer is not affected by the allocation of joint costs, only the relevant revenues and costs after split-off. Because the relevant revenue from further processing is 25………..

 

 

 

 

 

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