Question
Question 3: Tomato Town Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 2020, the joint costs of processing the
Question 3:
Tomato Town Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 2020, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:
Product | Cases | Sales Value at Splitoff Point | Separable Costs | Selling Price |
Catsup | 100,000 | $6 per case | $3.00 per case | $28 per case |
Juice | 150,000 | 8 per case | 5.00 per case | 25 per case |
Canned | 200,000 | 5 per case | 2.50 per case | 10 per case |
Required:
Determine the amount allocated to each product by using physical measures method and market-based methods, and compute the cost per case for each product.
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