Allocating 3oint Costs using the Weighted Average Method Sunny tane, Inc, purchases peaches from local orchards and sorts them into four categories. Grade A are large blernish-free peocher that can be sold to gourmet frut sellers. Grade B peaches are smaller and may be slightiy out of proportion. These are packed in boxes and sold to grocery stores. Peaches to be sliced for canned peaches are even smaller than Grade B peaches and have blemishes. Peaches to be pureed for use in sauces are of lower grade than peaches for slices, yet still food grade for canning. Information on a recent purchase of 20,000 pounds of peaches is as follows: Assume that Sunny Lane, Inc, uses the weighted averapen method of joint cost allocation and has assigned the following weights to the four grades of peaches: Fotal joint cost is $18,000 Required: 1. Allocate the jaint cost to the four grades of peaches using the weighted averege method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. 1. Allocite the joins cent to the four grades of peaches using the weighted overage method. Round your allocation percentages to four decimat places and round the allocated costs to the nearest dollar. (Rofe: The joint cont aliocation does not equal 118,000 due to recunding .) 2. What if the lactory found that Grade A peaches were beng velued leas by customers and decided to decrease the weight factar fin Grade A peaches to 2.07 How would that affect the allocabon of cost to Grade A peaches? How would it affect the allocation of cost to the remaining gredes? Round your aliocation percentages to four decimal places and round the allocated costs to the nearest dollar. (Note: The joint cost allocation does not equal $18,000 due to rounding.) 2. What if the factory feund that Grade A peoches were being walued iess by custamers and decided co decrease the weight factor for Grade A peoches to 2.07 How wevid that affect the alscation of cost to Grade A peaches? How would it affect the aliocatien of cont to the Cemaining grades? Round yeur allocation percentages to four decimal places and round the allocated costs to the nearest dellar. Wote: The joint cost alkication does not equal $18,000 due to reunding-) Fmathac Feikiny wou 1. Seme uificultes under the pliysical units methid can be overcame by usurg weight facters. These weighr facrars and their felatire weiphts are isually combined in a single value, called the weght facter. The weighted averoge mathod allous comb to plict reiatvely more value on certain typec or grades of unts itam on others
