Problem 5(5 points) Red Sauce Canning Company processes tomatoes into catsup, to
ID: 2568752 • Letter: P
Question
Problem 5(5 points) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20x5, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows: Product Cases Sales Value at Separable Costs Selling Price Splitoff Point $5.00 per cae 56 per case 8 per ca $28 per case 25 per case 150,000 200 uice 50 10 per case Required each product if the constant gross margin method is used, and compute the cost per case for each Determine the amount allocated to product. Note that some values have changed from previous problems.Explanation / Answer
Ref Cases Selling price Total revenue Separable costs Total separable costs Catsup 100000 28 2800000 5 500000 Juice 150000 25 3750000 5 750000 Canned 200000 10 2000000 1.5 300000 Total 8550000 1550000 A Total revenue 8550000 Less: Separable costs -1550000 Less: Joint costs -420000 B Gross margin 6580000 B/A Grossmargin percentage 76.96% Allocation Cases Selling price Total revenue Separable costs Gross margin % Gross margin Allocated joint costs Total costs Cost per unit A B C=A*B D E F=C*E G=C-D-F H=D+G I=H/A Catsup 100000 28 2800000 500000 76.96% 2,154,853.80 145,146.20 645,146.20 6.45 Juice 150000 25 3750000 750000 76.96% 2,885,964.91 114,035.09 864,035.09 5.76 Canned 200000 10 2000000 300000 76.96% 1,539,181.29 160,818.71 460,818.71 2.30 8550000 6,580,000.00 420,000.00 1,970,000.00