Atlanta Milling buys oats at $0.60 per pound and produces APM Oat Flour, APM Oat Flakes,...
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Atlanta Milling buys oats at $0.60 per pound and produces APM Oat Flour, APM Oat Flakes, and APM Oat Bran. The process of separating the oats into oat flour and oat bran costs $0.20 per pound. The oat flour can be sold for $1.50 per pound, the oat bran for $2.00 per pound. Each pound of oats has 0.2 pounds of oat bran and 0.8 pounds of oat flour. A pound of oat flour can be made into oat flakes for a fixed cost of $200,000 plus a variable cost of $0.75 per pound. Atlanta Milling plans to process five hundred twenty-five thousand pounds of oats in 20X0, at a purchase price of $315,000. Requirements 1. Allocate all the joint costs to oat flour and oat bran using the physical-units method. 2. Allocate all the joint costs to oat flour and oat bran using the relative-sales-value method. 3. Suppose there were no market for oat flour. Instead, it must be made into oat flakes to be sold. Oat flakes sell for $2.90 per pound. Allocate the joint cost to oat bran and oat flakes using the relative-sales-value method. Requirement 1. Allocate all the joint costs to oat flour and oat bran using the physical-units method. (Round the weighting to three decimal places.) Oat flour Oat bran Pounds Weighting Allocation of joint costs Atlanta Milling buys oats at $0.60 per pound and produces APM Oat Flour, APM Oat Flakes, and APM Oat Bran. The process of separating the oats into oat flour and oat bran costs $0.20 per pound. The oat flour can be sold for $1.50 per pound, the oat bran for $2.00 per pound. Each pound of oats has 0.2 pounds of oat bran and 0.8 pounds of oat flour. A pound of oat flour can be made into oat flakes for a fixed cost of $200,000 plus a variable cost of $0.75 per pound. Atlanta Milling plans to process five hundred twenty-five thousand pounds of oats in 20X0, at a purchase price of $315,000. Requirements 1. Allocate all the joint costs to oat flour and oat bran using the physical-units method. 2. Allocate all the joint costs to oat flour and oat bran using the relative-sales-value method. 3. Suppose there were no market for oat flour. Instead, it must be made into oat flakes to be sold. Oat flakes sell for $2.90 per pound. Allocate the joint cost to oat bran and oat flakes using the relative-sales-value method. Requirement 1. Allocate all the joint costs to oat flour and oat bran using the physical-units method. (Round the weighting to three decimal places.) Oat flour Oat bran Pounds Weighting Allocation of joint costs
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