Question
saskatchewan soy products buys beans and processes them into other soy products.each tonne of soy beans that SSP purchases for $300 can be converted for
saskatchewan soy products buys beans and processes them into other soy products.each tonne of soy beans that SSP purchases for $300 can be converted for an additional $200 into 500 lbs of soy meal and meal gallons of soy oil . a pound of soy meal can be sold at splitoff for $1 and soy oil can be sold in bulk for $4 per gallon . SSP CAN PROCESS THE 500 lbs of soy meal into 600 lbs of soy cookies at an additional cost of $300. each pound of soy cookies can be sold for $2 per pound . the 100 gallons of soy oil can be packaged at a cost of $200 and made into 400 quarts of soyola can be for $1.25
required:
1- allocate the joint cost to the cookies and the soyla using :
a) sales value at spi toff method
b)net realizable value
2- should the company have processed each of the products further? what effect does the allocation method have on this decision ?
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