Organic

Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July

2018

is as follows:

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(Click the icon to view the production information.)Joint cost of production in July

2018

was

$80.

A special shipment of

50

kilograms of breasts and

10

kilograms of wings has been destroyed in a fire.

Organic

Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits

Organic

Chicken to use a joint cost allocation method. The splitoff point is assumed to be at the end of the production process.Required

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Requirement 1a. Calculate the cost of the special shipment destroyed using the sales value at splitoff method.

Complete the table below to assist you. (Round the weighting to three decimal places and the allocated costs per kilogram to four decimal places. Round all other amounts to the nearest cent.)

	Breasts	Wings	Thighs	Bones	Feathers	Total
Kilograms of product	150	30	30	75	15
Wholesale selling price per kilogram	$0.40	$0.30	$0.45	$0.15	$0.10
Sales value at splitoff
Weighting: Sales value at splitoff
Joint costs allocated
Allocated costs per kilogram

1.	Calculate the cost of the special shipment destroyed using:
	a.	Sales value at splitoff method
	b.	Physical measure method (kilograms of finished product)
2.	What joint cost allocation method would you recommend Organic Chicken use? Explain. PLEASE DO AS SOON AS POSSIBLE.