Oriole \& Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Oriole currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. (a) Using the NRV method for allocating joint costs, specify how much joint cost will be allocated to the juice and to the puree/spaghetti sauce: (Round proportion to 4 decimal places, e.3. 0.2516 and final answers to 2 decimal places, e.3. 15.25. As production manager, Anthony noticed that several recent production runs generated a decent-sized collection of scrap pieces in the designated scrap bin. He looks at current prices for this scrap and recognizes the market priceis relatively high for this material right now, so he makes plans to sell it. He estimates that there are 49 pounds of scrap available to be sold. The current sales price is $6 per pound for this particular scrap material. (a) Assume Anthony uses the sales method to account for scrap. Record the journal entry for the sale of all the scrap for cash. (Credit account tities are outomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts, List debit entry before credit entry.) Sheridan Sawmill Co, runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lower-grade lumber, has been sold as-is to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported. Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lower-grade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return. Determine the gross margin levels and percentages Paul is looking at for last year's results (assume all products produced were sold). Use the sales value at split-off method to allocate joint costs. (Round proportion to 4 decimal ploces, e.g. 0.2516, allocated joint costs and gross margin to 0 decimal places, e.g. 5,125 and gross margin percentage to 2 decimal places, e.g. 15.25\%.)
