Company processes tomatoes into ketchup, tomato juice, and canned tomatoes. During July 2020, the joint costs of processing the tomatoes were $1,603,400.

The company maintains no inventories. Production and sales information follows:

Calculate the amount of joint cost allocated to each product if Organic Dot uses the constant gross-margin percentage NRV method.

Begin by determining the overall gross margin.

____ - _____ = Overall Gross Margin

_____ - ______ = _______________

Now determine the gross margin allocated to each product using the table below and then calculate the joint costs allocated to each product if Organic Dot uses the constant gross-margin percentage NRV method.

Product: Final Sales Value Gross Margin % Gross Margin Allocated Total Production Costs Total Separable Costs Joint Costs Allocated

Ketchup

Juice

Canned

Totals

Data Table: Cases Sales value at Spilt Point Separable Costs Selling Price

Ketchup 101,000 $11 per case $9 per case $25 per case

Juice 170,000 $10 per case $8 per case $35 per case

Canned 201,000 $14 per case $2 per case $11 per case

Reference:

Final Sales Total Separable Net Realizable Value Percentage Joint Costs Costs Allocated Separable Costs Total Product Costs

Ketchup $2,525,000 $909,000 $1,616,000 20% $1,603,400 $320,680 $909,000 $1,229,680

Juice $5,950,000 1,360,000 4,590,000 57% 1,603,400 913,938 1,360,000 2,273,938

Canned 2,211,000 402,000 1,809,000 23% 1,603,400 368,782 402,000 770,782