Pirate Seafood Company purchases lobsters and processes them into tails and flak
ID: 2448681 • 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 $15.70 per pound. On average, 100 pounds of lobster are processed into 55 pounds of tails and 28 pounds of flakes, with 17 pounds of waste Assume that the company purchased 3,900 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $5,500. No materials or labor costs are assigned to the waste. If 1,996 pounds of tails and 1,021 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.)Explanation / Answer
Solution:
(A). Cost Per Pound of Lab Tails:
= 15,600 + 5,500 = 21,100
= 21,100 / 3,900
= 5.41
(B). Cost Per Pound of LabFlakes:
= 15,600 / 3,900
= 4
(C) Ending Inventory :
Begining Inventory 55 * 4 220
+ Purchase 3900 * 5.41 21,100
= 21,320
- Sales 1,990 * 20.20 40,198
Closing Inventory = 18,878
(*). Cost of Goods Sold:
Begining Inventory 55 * 4 220
+ Purchase 3900 * 5.41 21,100
= 21,320
- Closing Inventory 18,878
Cost of Goods Sold = 2,442
(D). Ending Inventory:
Begining Inventory 11 * 4 = 44
+ Purchase 21,100
= 21,144
- Sales 3,900 * 15.70 16,030
Closing Inventory = 16,030
(*). Cost of Goods Sold:
Begining Inventory 11 * 4 = 44
+ Purchase 21,100
= 21,144
Closing Inventory 16,030
Cost of Goods Sold = 5,114
Cost Per Pound =Total FixedCost + Total Variable Costs / No.of Units Produced