Problem 22-5AC Allocation of joint costs Lo C3 [The following information applies to the questions displayed below.] Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on its No. 3 peaches. GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2017 No. 1 No. 2 No. 3 Combined Sales (by grade) No. 1: 380,000 Ibs. $1.50/1b No. 2: 380,000 Ibs. $0.90/1b No. 3: 1,140,000 Ibs. $0.20/1b Total sales $570,000 $342,000 $ 228,000 $1,140,000 Costs Tree pruning and care $0.30/Ib Picking, sorting, and grading s0.10/Ib Delivery costs Total costs 570,000 190,000 72,900 832,900 $401,200 $173,200 $ (267,300) 307,100 114,000 114,000 342,000 38,000 38,000 114,000 16,800 168,800 168,800 495,300 16,800 39,300 Net income (loss) In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The company's delivery cost records show that $33,600 of the $72,900 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,300 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery Problem 22-5AC Part1 Required: 1. Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.) ree Pruning and Care Grade Nos Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost | 1,140,000 1,140,000 1,140,000 Sales value Numerator Denominator % of Total 570,000 342,000 228,000 1,140,000 570,000 342,000 228,000 50.00 $ 30.00 20.00 570,000 570,000 570,000 O. No. 2 No. 3 Totals Picking, Sorting, and Grading Grade Nos 100.00 570,000 Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Sales value Numerator Denominator %Of Total O. No. 2 No. 3 Totals Delivery: Grade Nos rcent of Allocation Bas Denominator Allocation Base x Indirect Cost Allocated Cost ales value Numerator | % of Total O. No. 2 No. 3 Totals