Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and cann
ID: 2364648 • Letter: R
Question
Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, 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 Product Cases Sales Value at Splitoff Point Separable Costs Selling Pric Catsup 100,000 $6 per case $3.00 per case $28 per case Juice 150,000 8 per case 5.00 per case 25 per case Canned 200,000 5 per case 2.50 per case 10 per case Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each productExplanation / Answer
) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 2015, 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
Separable Costs
Selling Price
Catsup
100,000
$3.00 per case
$28 per case
Juice
150,000
5.00 per case
25 per case
Canned
200,000
2.50 per case
10 per case
Required:
Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.
Product
Expected Sales Value
Separable Costs
Net Realizable Value
Percentage
Catsup
$2,800,000
$300,000
$2,500,000
35.71
Juice
3,750,000
750,000
3,000,000
42.86
Canned
2,000,000
500,000
1,500,000
21.43
Totals
$7,000,000
100.00
Product
Percentage
Joint Costs
Allocated
Separable Costs
Product Costs
Catsup
35.71% ×
$420,000 =
$149,982 +
$300,000 =
$449,982
Juice
42.86% ×
420,000 =
180,012 +
750,000 =
930,012
Canned
21.43% ×
420,000 =
90,006 +
500,000 =
590,006
Catsup cost per case = $449,982/100,000 = $4.50
Juice cost per case = $930,012/150,000 = $6.20
Canned cost per case = $590,006/200,000 = $2.95
Product
Cases
Separable Costs
Selling Price
Catsup
100,000
$3.00 per case
$28 per case
Juice
150,000
5.00 per case
25 per case
Canned
200,000
2.50 per case
10 per case
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.