Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Allocating Joint Costs Using the Weighted Average Method Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are

Allocating Joint Costs Using the Weighted Average Method Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 20,000 pounds of apples is as follows: Assume that Orchard Fresh, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades of apples: Weight Grades Pounds Factor Grade A 1,600 4.0 Grade B 4,000 2.0 Slices 9,000 1.0 Applesauce 5,400 0.5 Total 20,000 Total joint cost is $20,000. 1. Allocate the joint cost to the four grades of apples using the weighted average method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Grades Joint Cost Allocation Grade A Grade B Slices Applesauce Total (Note: The joint cost allocation does not equal $20,000 due to rounding.) 2. What if the factory found that Grade A apples were being valued less by customers and decided to decrease the weight factor for Grade A apples to 3.07 How would that affect the allocation of cost to Grade A apples? How would it affect the allocation of cost to the remaining grades? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Grades Grade A Grade B Joint Cost Allocation 2. What if the factory found that Grade A apples were being valued less by customers and decided to decrease the weight factor for Grade A apples to 3.0? How would that affect the allocation of cost to Grade A apples? How would it affect the allocation of cost to the remaining grades? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar. Grades Grade A Grade B Slices Applesauce Total Joint Cost Allocation (Note: The joint cost allocation does not equal $20,000 due to rounding.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Financial Reporting With Powerpivot

Authors: Florent Cailly, Thomas Brajcich

1st Edition

1517437563, 978-1517437565

More Books

Students also viewed these Accounting questions

Question

=+j on to staff their operations in the global marketplace.

Answered: 1 week ago