Question 2

Swifty Friends is a small nursery. The company grows rhododendrons and azaleas. The plants are dug up and potted after three years of growth. Some of them are considered premium because they are taller and have more bloom buds than the rest. They are placed in a greenhouse for several months, fertilized heavily, and then sold when they are in bloom. The others are sold at the time they are dug. Joint costs for raising the plants are $14,120. Following is information about potential allocation bases for the joint costs of growing the plants:

Allocation Base		Premium			Regular
Number of pots		2,040	pots		7,260	pots
Sales value per pot at the time they are dug		$5			$3
Net realizable value (NRV) per pot		$27			$11

(a1)

Allocate the joint cost using the sales value at split-off point. (Round entries to whole amounts e.g. 5,987. Round percentage of allocation to 2 decimal places, e.g. 23.51% for your calculations.)

		Allocation
Product		of $14,120
Premium		$
Regular

Question 2 Swifty Friends is a small nursery. The company grows rhododendrons and azaleas. The plants are dug up and potted after three years of growth. Some of them are considered premium because they are taller and have more bloom buds than the rest. They are placed in a greenhouse for several months, fertilized heavily, and then sold when they are in bloom. The others are sold at the time they are dug. Joint costs for raising the plants are $14,120. Following is information about potential allocation bases for the joint costs of growing the plants: Allocation Base Number of pots Sales value per pot at the time they are dug Net realizable value (NRV) per pot Premium 2,040 pots $5 $27 Regular 7,260 pots $3 $11 v (al) Allocate the joint cost using the sales value at split-off point. (Round entries to whole amounts e.g. 5,987. Round percentage of allocation to 2 decimal places, e.g. 23.51% for your calculations.) Allocation of $14,120 Product Premium Regular