Flori-Dante Srl grows, processes, packages and sells three joint apple products:

(a) sliced apples that are used in frozen pies,

(b) apple sauce, and

(c) apple juice. The apple peel, processed as animal feed, is treated as a by-product. Flori-Dante uses the estimated NRV method to allocate costs of the joint process to its joint products. The by-product is inventoried at its selling price when produced; the net realisable value of the by-product is used to reduce the joint production costs before the split-off point. Details of Flori-Dante production process are presented here:

 after processing in the Cutting Department. Each product is then transferred to a separate department for final processing.

A total of 270 000 kg of apples were entered into the Cutting Department during November.
The following schedule shows the costs incurred in each department, the proportion by weight transferred to the four final processing departments and the selling price of each end-product.
Processing data and costs November 2022

Required

1 Flori-Dante uses the estimated NRV method to determine stock cost of its joint products;
by-products are reported on the balance sheet at their selling price when produced. For the month of November 2022, calculate the following:
a The output for apple slices, apple sauce, apple juice and animal feed, in kilograms.
b The estimated NRV at the split-off point for each of the three joint products.
c The amount of the cost of the Cutting Department assigned to each of the three joint products and the amount assigned to the by-product in accordance with corporate policy.
d The gross margins in euros for each of the three joint products.
2 Comment on the significance to management of the gross-margin monetary information by joint product for planning and control purposes, as opposed to stock-costing purposes.

Transcribed Image Text:

The apples are washed and the peel is removed in the Cutting Department. The apples are then cored and trimmed for slicing. The three joint products and the by-product are recognisable