Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Appledore Inc. processes apples up to the split-off point, where two products, applesauce and apple juice, result. The following information was collected for the month

Appledore Inc. processes apples up to the split-off point, where two products, applesauce and apple juice, result. The following information was collected for the month of September:

Production:

Applesauce 135,000 litres

Apple juice 165,000 litres

Sales:

Applesauce $3.75 per litre

Apple juice $2.45 per litre

Apples processed: 220,000 kilograms

Purchase cost of 220,000 kilograms and processing costs to split-off point: $165,400

Yield: 300,000 litres of saleable product

Applesauce may be processed further to yield 25,500 kilograms of dried apple candy (the remainder is shrinkage). The additional processing cost is $15.65 per kilogram of candy. The candy can be sold for $37 a kilogram.

Apple juice can be processed further to produce 185,000 litres of a sparkling fancy apple drink. The additional content is sparkling water. The additional processing cost per usable litre of drink is $3.05. The product can be sold for $6 per litre.

There are no beginning and ending inventory balances.

How much is Appledore's profit if only the apple juice is processed further into fancy apple drink, and all units of applesauce and fancy apple drink are sold?

a) $745,100

b) $783,275

c) $886,600

d) $924,775

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

Financial Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel,  Jerry J. Weygandt,  Jill E. Mitchell

10th Edition

1119791081, 978-1119791089

More Books

Students also viewed these Accounting questions