22.6

Georgla Orchards produced a good crop of peaches this year. After preparing the following Income statement, the company is concerned about the net loss on Its No. 3 peaches. In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The company's delivery cost records show that $31,400 of the $69,600 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $38,200 of dellvery costs is for crating the No. 3 peaches and hauling them to the cannery. Requlred: 1. Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly Identfiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round Intermedlate calculations.) Delivery