Novak & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Novak currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce (a) $154,000 Allocated joint costs S 10,000 gallons $3 16,000 pounds $18,000 $196,000 Using the NRV method for allocating joint costs, specify how much joint cost will be allocated to the juice and to the puree/spaghetti sauce. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.) Juice per gallon Purce/Sauce

Novak & Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Novak currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Joint processing costs Quantity of tomato juice produced Value of tomato juice Quantity of tomato puree produced Additional cost to make spaghetti sauce Final sales value of spaghetti sauce (a) $154,000 Allocated joint costs S 10,000 gallons $3 16,000 pounds $18,000 $196,000 Using the NRV method for allocating joint costs, specify how much joint cost will be allocated to the juice and to the puree/spaghetti sauce. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.) Juice per gallon Purce/Sauce

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Swagger Corporation purchases potatoes from farmers. The potatoes are then peeled, producing two intermediate products-peels and depeeled spuds. The peels can then be processed further to make a cocktail of organic nutrients. And the depeeled spuds can be processed further to make frozen french fries. A batch of potatoes costs $44 to buy from farmers and $12 to peel in the company's plant. The peels produced from a batch can be sold as is for animal feed for $26 or processed further for $17 to make the cocktail of nutrients that are sold for $46. The depeeled spuds can be sold as is for $37 or processed further for $26 to make frozen french fries that are sold for $58. Required: a. Assuming that no other costs are involved in processing potatoes or in selling products, how much money does the company make from processing one batch of potatoes into the cocktail of organic nutrients and frozen french fries? b. Should each of the intermediate products, peels and depeeled spuds, be sold…
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Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Suppose that the separation process…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. If Garden were to use the constant…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Calculate the gross margin on the sale…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Compute the cost of ending inventory…