Pirate Seafood Company purchases lobsters and processes them into tails and flak
ID: 2393849 • Letter: P
Question
Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $20.20 per pound and the flakes for $15.60 per pound. On average, 100 pounds of lobster are processed into 58 pounds of tails and 26 pounds of flakes, with 16 pounds of waste. Assume that the company purchased 3,400 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $6,900. No materials or labor costs are assigned to the waste. If 1,840 pounds of tails and 797 pounds of flakes are sold, calculate the allocated cost of the sold items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. (Round your answers to nearest whole number. Round cost per pound answers to 2 decimal places.) Allocated cost Cost per Yield per 3,400 lb. purchase Market Value per 3,400 lb. purchase Cost to be allocated 3,400 pound purchase Percent of Market Value pound Numerator Denominator | % of Mkt Value Lobster Tails Lobster Flakes Totals 1) What is the allocated cost of the sold items? Cost per pound Pounds sold Cost of Goods Sold Lobster Tails $ Lobster Flakes $ Totals 2) What is the allocated cost of the ending inventory? 0.00 0.00 Cost per pound Pounds in ending inventory Cost of Ending Inventory Lobster Tails$ Lobster Flakes $ Totals 0.00 0.00Explanation / Answer
SOLUTION
(1)
(2)
Yield for 3,400 lb. purchase Market value per 3,400 lb. purchase Percent of market value Percent of market value Percent of market value Cost to be allocated Allocated cost 3,400 pound purchase Cost per pound (A) Numerator Denominator % of market value (3,400*$4)+6,900 (B) (A/B) Lobster Tails (58 * 34) = 1,972 (1,972*$20.20) = 39,834 39,834 53,624 74% 20,500 15,170 7.69 Lobster Flakes (26 * 34) = 884 (884*$15.60)= 13,790 13,790 53,624 26% 20,500 5,330 6.03 Totals 53,624 20,500