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Flint Flour Co. refines regular flour into specialty baking flours. Five pounds of regular flour are processed into 3 cups of sourdough baking flour and
Flint Flour Co. refines regular flour into specialty baking flours. Five pounds of regular flour are processed into 3 cups of sourdough baking flour and 12 cups of pumpernickel flour. In January, Flint Flours bought 60,000 pounds of flour for $73,000. They spent another $25,600 for their special processing process. The sourdough flour can be sold for $4.10 per cup and the pumpernickel flour for $5.20 per cup. Each cup of sourdough flour can be processed into a cup of sweetened sourdough flour for making a unique sweet sourdough bread. The sweetened sourdough flour sells for $10.60 per cup. This additional process costs $.50 per input cup. 1. Allocate the joint costs ($73,000 + 25,600) between sourdough and pumpernickel flours using: a. Sales value at split off Sourdough Pumpernickel b. Physical measure (cups) Sourdough Pumpernickel C. NRV Sourdough Pumpernickel 2. If we process the sourdough flour into sweetened sourdough flour the incremental effect on profit is a/an $ (increase/decrease - pick one)
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