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Harper Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and

Harper Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 25,000 pounds of raw chicken that costs $17,500, the company produces two parts: 4,400 pounds of drumsticks and 6,200 pounds of breast for a processing cost of $3,648. The chicken breast is further processed into 5,400 pounds of steak for a processing cost of $3,400. The market price of drumsticks per pound is $1.85 and the market price per pound of chicken steak is $5.40. If Harper decided to sell chicken breast instead of chicken steak, the price per pound would be $2.70. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a-2. Calculate the gross margin for each product. a-3. If the drumsticks are producing a loss, should that product line be eliminated? b-1. Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base. b-2. Calculate the gross margin for each product. c-1. Should Martin further process chicken breasts into chicken steak? (Use the assumption made in requirement b-1). c-2. How would the profit be affected by your answer in c-1?

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. (Round "Allocation rate" to 2 decimal places.)

Product Allocation Rate x Weight of Base = Allocated Cost
Drumsticks x =
Chicken breast x =
Total allocated cost

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

Calculate the gross margin for each product.

Chicken Drumsticks Chicken Breast
Revenue
Cost of goods sold
Gross margin

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

If the drumsticks are producing a loss, should that product line be eliminated?

The drumstick product line be eliminated.

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base. (Round intermediate calculations and final answers to 2 decimal places.)

Total cost of drumsticks=
Total cost of chicken breasts=

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

Calculate the gross Profit for each product. (Round intermediate calculations and final answers to 2 decimal places.)

Chicken Drumsticks Chicken Breast
Revenue
Cost of goods sold
Gross profit

Should Harper further process chicken breasts into chicken steak? (Use the assumption made in requirement b-1).

Harper can further process chicken breasts into chicken steak. =

Complete this question by entering your answers in the tabs below.

Required A1

Required A2

Required A3

Required B1

Required B2

Required C1

Required C2

How would the profit be affected by your answer in c-1?

Effect on profit = =

PLEASE SHOW ALL WORK AND ANSWERS IN THIS FORMAT.

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