35) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and
ID: 2596680 • Letter: 3
Question
35) Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and the summer of 2017, the joint costs of processing the tomatoes were $420 ending inventories for the summer. Production and sales value information for Sales Value at Product Cases Catsu Juice Split-off Point Separable Costs Selling Price $6 per case $3.00 per case $28 per cas per case 5.00 per case 25 per cas 10 per ca 100,000 150,000 anned 200,0005per case 2.50 per case 5 per case The amount allocated to each product if the estimated net realizable value me A) Catsup $720,000; Juice $0: Canned $0 B) Catsup $300,000; Juice $750,000; Canned $500,000 C) Catsup $449,982; Juice $930,012; Canned $500,000 D) Catsup $2,500,000; Juice $3,000,000; Canned $1,500,000 6) Oregon Lumber processes timber into four products. During January, the joi $280,000. There was no inventory at the beginning of the month. Production for the month is as follows: Sales Value at Product Board feet Split-off Point Ending Invent 3,000,000 2,000,000 1,000,000 6,000,000$0.30 per board foot 0.40 per board foot 0.45 per board foot 0.10 per board foot 500,000 bo 250,000 b 100,000 b 50,000 b The value of ending inventory if the sales value at split-off method is use decimal places when necessary A) Product A $120,000; Product B $90,000; Product C $50,000; Product S tc 663 0on. Product
Explanation / Answer
Answer :C)catsup$449,982 ; juice$930,012 ; canned$590,000
Amount allocated to each product under net realisable value
Product
Estimated value
Separable costs
Net value
percentage
catsup
(28*100,000)= $2,800,000
(3*100,000)=$300,000
$2,500,000
(2,500,000/7,000,000)=35.71%
Juice
(25*150,000)= $3,750,000
(5*150,000)=$750,000
$3,000,000
(3,000,000/7,000,000)=42.86%
Caned
(10*200,000)=$2,000,000
(2.5*200,000)=$500,000
$1,500,000
(1,500,000/7,000,000)=21.43%
total
$7,000,000
100%
product
joint costs
allocated
separable costs
product costs
catsup
$420,000
(420,000*35.71%)=$149,982
$300,000
$449,982
juice
$420,000
(420,000*42.86%)=$180,012
$750,000
$930,012
caned
$420,000
(420,000*21.43%)=90,000
$500,000
$590,000
Product
Estimated value
Separable costs
Net value
percentage
catsup
(28*100,000)= $2,800,000
(3*100,000)=$300,000
$2,500,000
(2,500,000/7,000,000)=35.71%
Juice
(25*150,000)= $3,750,000
(5*150,000)=$750,000
$3,000,000
(3,000,000/7,000,000)=42.86%
Caned
(10*200,000)=$2,000,000
(2.5*200,000)=$500,000
$1,500,000
(1,500,000/7,000,000)=21.43%
total
$7,000,000
100%
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