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Question 2 Comfy Confections Company purchases cocoa beans and processes them into cocoa butter, a powder, and shells. The standard yield from processing each 100-grams
Question 2 Comfy Confections Company purchases cocoa beans and processes them into cocoa butter, a powder, and shells. The standard yield from processing each 100-grams sack of cocoa beans is 20 grams of butter, 45 grams of powder, and 35 grams of shells. The powder can be sold for RM0.90 per gram and the butter for RM1.10 per gram at the split-off point. The cost of the cocoa beans up to the split-off point cost is RM54 Required 1. Compute the joint cost allocated to cocoa butter and cocoa powder produced from 100 grams of cocoa beans using the sales value at split off point method. (7 marks) 2. Use the physical-measures method to allocate costs (5 marks) 3. Assume that the cocoa butter could be sold either at split off or after additional processing The additional processing costs RM0.15 per gram, at which point the butter can be sold for RM 1.60. Allocate the joint costs using the net realizable value method. (7 marks) 4. Assume that the 35 grams shell can be further process into a by-product for the use in farming. This is done by additional processing that cost RM0.55. The by-product can be sold at RM2.05. Calculate the by-product NRV and explain what we do with the amount of by- product calculated. (4 marks) 5. Explain the difference between joint and by products (2 marks)
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