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California Soy buys soy beans and processes them into soy meal and soy oil. One ton of soy beans can be processed into 120 gallons
California Soy buys soy beans and processes them into soy meal and soy oil. | |||||||||
One ton of soy beans can be processed into 120 gallons of soy meal and 180 gallons | |||||||||
of soy oil at a cost of $2,000. A gallon of soy meal can be sold for $6.00. A gallon of soy oil | |||||||||
oil can be sold (in bulk) for $12.00. | |||||||||
California Soy then processes the 120 gallons of soy meal into 1,000 pounds of soy cookies at an | |||||||||
additional cost of $1,165. Soy cookies are sold for $6 per pound. | |||||||||
The 180 gallons of soy oil is ultimately packaged (at a cost of $553) into 700 quarts of Soyola. | |||||||||
Each quart of Soyola is sold for $3.75 |
How much of the joint costs should be allocated to Soyola under the NRV method? | |||||||||
Assuming every pound of cookies and all quarts of Soyola produced made from a ton of soy beans are sold, | |||||||||
4. What would gross profit be for Soy Cookies under the physical unit method? | |||||||||
5. What would gross profit be for Soy Cookies under the sales value at split-off method? | |||||||||
6. What would gross profit be for Soyola under the NRV method? | |||||||||
7. What is the incremental profit (or loss) for California Soy when soy meal Is further processed into soy | |||||||||
cookies? | |||||||||
8. What is the incremental profit (or loss) for California Soy when soy oil is further processed into Soyola? |
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