Question
In 2019, Sam decided she should dry and prepare the B grade and C grade leaves for sale herself, rather than selling them at the
In 2019, Sam decided she should dry and prepare the B grade and C grade leaves for sale herself, rather than selling them at the split-off point. Just as in 2018, the harvesting costs for the tea were $400,000, and the harvest yielded 14,500 bushels of A grade leaves, 15,500 bushels of B grade leaves and 18,000 bushels of C grade leaves. The A grade leaves were sold for $17 per bushel, but the B grade and C grade leaves were all processed further, and not made available for sale at the split-off point. The additional processing costs for the prepared B grade leaves were $95,000, and the 15,500 bushels were sold for $450,000. The additional processing costs for the prepared C grade leaves were $200,000, and the 18,000 bushels were sold for $770,000. Assume that Sam allocates joint costs using the net realizable value method.
How much of the joint cost will be allocated to: SHOW WORK
A grade leaves?
B grades leaves?
C grades leaves?
What is the gross profit percentage per bushel?
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