QUESTIONS: 1. What would gross profit be for Chocolate Almond Delights under the

Question

QUESTIONS:

1. What would gross profit be for Chocolate Almond Delights under the sales value at split-off method?

2. What would gross profit be for Chocolate Almond Delights under the NRV method?

3. What is the incremental profit (or loss) for Almond Delights when Premium almonds are further processed into Chocolate Almond Delights? (Enter a loss in parentheses.)

4. What is the incremental profit (or loss) for Almond Delights when Choice almonds are further processed into All Natural Almond Butter? (Enter a loss in parentheses.)

Problem A Almond Delights is an almond grower. They have two primary products Premium Almonds and Choice Almonds. One acre of almond trees yields about 600 pounds of Premium and 1,400 pounds of Choice almonds at a cost of $6,000. Apound of Premium Almonds can be sold for $6.68. A pound of Choice can besold for $4.28. Almond Delights further processes the 1,400 pounds of Choice almonds into 175 gallons of All Natural Almonod Butter at an additional cost of $2,500. All Natural Almond Butter is sold for $40 pergallon. The 400 pounds of Premium Almonds is further processed into 450 pounds of Chocolate Almond Delights at an additional cost of $900. Each pound of Chocolate Almond Delights is sold for $12.

Explanation / Answer

Solution 1:

Solution 2:

Solution 3:

Solution 4:

Allocation of Joint Cost - Sale Value at Split off Point Particulars Premium Almond Choice Almond Total Sale Value at Split off point $4,008 $5,992 $10,000 Allocation of Joint Cost
Premium Almond - $6000*4008/10000
Choice Almond - $6000*5992/10000 $2,404.80 $3,595.20 $6,000

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---