Galinha-Esquina SA grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to

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Galinha-Esquina SA grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2022 is as follows:image text in transcribed

Joint costs of production in July 2022 were €100.
A special shipment of 20 kg of breasts and 10 kg of wings has been destroyed in a fire. Galinha-
Esquina’s insurance policy provides for reimbursement for the cost of the items destroyed. The insurance company permits Galinha-Esquina to use a joint-cost-allocation method. The split-off point is assumed to be at the end of the production line.
Required 1 Calculate the cost of the special shipment destroyed using

(a) the sales value at split-off point method, and

(b) the physical measure method using kilograms of finished product.
2 Which joint-cost-allocation method would you recommend that Galinha-Esquina use?

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Related Book For  book-img-for-question

Management And Cost Accounting

ISBN: 9781292436029

8th Edition

Authors: Alnoor Bhimani, Srikant Datar, Charles Horngren, Madhav Rajan

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