Module 14 Homework Assignment ACCT 111 Problem A Almond Delights is an almond gr

Question

Module 14 Homework Assignment ACCT 111 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. A pound of Premium Almonds can be sold for $6.68. Apound of Choice can be sold for $4.28. Almond Delights further processes the 1,400 pounds of Choice almonds into 175 gallons of All Natural Almond Butter at an additional cost of $2,500. All Natural Almond Butter is sold for $40 per gallon. 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 1. How much of the joint costs should be allocated to All Natural Almond Butter under the physical unit method?

Explanation / Answer

Joint Cost to be allocated = $6,000

Calculation of Net Realisable Value:

Premium Almonds Choice Almonds Production (in pounds) 600 1,400 Allocation of Joint Cost
[Physical Unit Method] 1,800 4,200 Selling Price per pound 6.68 4.28 Total Sales Value 4,008 5,992 Allocation of Joint Cost
[Sales Value Method] 2,405 3,595

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