Pirate Seafood Company purchases locations and processess them into tails and fl
ID: 2474233 • Letter: P
Question
Pirate Seafood Company purchases locations and processess them into tails and flakes. It sells the jobseter tails for $21 per pound and the flakes for $14 per pound. On average, 100 pounds of lobsser are processed into 52 pounds of tails and 22 pounds of flakes with 26 pounds of waer. Assume that the company purchased 2,400 pounds of lobseter for $4.50 per pound and processed the lobseters with an assitionsl labor cost of $1,800. no materials or labor costs are assigned to the waste. If 1,096 pounds of tails and 324 pounds of flakes are acid, calculate the allocated cost of the solid items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. 1) What is the allocated cost of the sold items? 2) What is the allocated cost of the ending inventory?Explanation / Answer
Cost required is calculated as under:
Percent of market value Yield per 2,400 lb. purchase Market value per 2,40 lb. purchase Numerator Denominator Market value Cost to be allocated Allocated Cost 2,400 Pound purchase Cost per pound Lobster tails 1248 26208 26208 33600 78% 12,600 9828 7.88 Lobster flakes 528 7392 7392 33600 22% 12,600 2772 5.25 Total 33600 33600 25200 12600 Cost per pound Pounds sold Cost of goods sold Lobster tails 7.88 1096 8636 Lobster flakes 5.25 324 1701 Total 13.13 1420 10337 Cost per pound Pounds in ending inventory Cost of ending inventory Lobster tails 7.88 152 1198 Lobster flakes 5.25 204 1071 Total 13.13 356 2269