The Rich and Creamy Edibles Factory manufactures and distributes chocolate products. (Click the icon to view more information about Rich and Creamy.) Production and sales data for August 2017 are as follows (assume no beginning inventory): (Click the icon to view the data.) Read the requirements Requirement 1. Calculate how the joint costs of $70,000 would be allocated between chocolate powder and milk chocolate under the different methods. a. Sales value at splitoff method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places.) More Info Joint costs Sales value of total production at splitoff allocated Chocolate powder Milk chocolate Weighting .4286 -5714 30000 40000 70.000 It purchases cocoa beans and processes them into two intermediate products: chocolate powder liquor base and milk-chocolate liquor base. These two intermediate products become separately identifiable at a single splitoff point. Every 600 pounds of cocoa beans yields 20 gallons of chocolate-powder liquor base and 60 gallons of milk-chocolate liquor base. 1.0000 Total b. Allocate the joint costs using the physical measure method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places.) The chocolate-powder liquor base is further processed into chocolate powder. Every 20 gallons of chocolate-powder liquor base yield 680 pounds of chocolate powder. The milk-chocolate liquor base is further processed into milk chocolate. Every 60 gallons of milk-chocolate liquor base yield 1.100 pounds of milk chocolate. Physical measure of total production Joint costs allocated $ 17.500 Chocolate powder Milk chocolate Weighting 0.2500 0.7500 1.0000 52.500 Print Done $ 70.000 Total c. Allocate the joint costs using the net realizable value method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places. Round the joint costs allocated to the nearest whole dollar.) i More Info Net realizable value 204 205 400.315 Chocolate powder Joint costs Weighting allocated 0.3378 5 23.646 0.6622 46355 1.0000 70,000 Milk chocolate 604.520 Total . Cocoa beans processed. 27.600 pounds . Costs of processing cocoa beans to splitoff point (including purchase of beans). $70,000 Separable Production Sales Selling Price Processing Costs Chocolate powder 31,280 pounds 6.800 pounds $8 per pound $ 46,035 Milk chocolate 50.600 pounds 14,400 pounds $9 per pound $ 55,085 Rich and Creamy Edibles Factory fully processes both of its intermediate products into chocolate powder or milk chocolate. There is an active market for these intermediate products. In August 2017, Rich and Creamy Edibles Factory could have sold the chocolate powder liquor base for $21 a gallon and the milk-chocolate liquor base for $28 a gallon. d. Constant gross-margin percentage NRV method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the percentage to four decimal places, X.XXXX%.) The overall gross-margin percentage for all joint products together is .7575 %. Now determine the formula to compute the joint costs allocated, then enter the appropriate amounts. (Round your answers to the nearest whole dollar.) Revenue . Gross margin = Joint costs allocated Chocolate powder 204205 - 23646 = 180559 Milk chocolate 400315 - 46355 = 353961 Print Done Requirement 2. Could Rich and Creamy Edibles Factory have increased its operating income by a change in its decision to fully process both of its intermediate products? Show your computations. (Use parentheses or a minus sign when entering decreasing amounts.) Begin by determining the formula to compute the increase/(decrease) in operating income, then enter the appropriate amounts. Increase/(decrease) in operating income Incremental revenue = Chocolate powder Milk chocolate Rich and Creamy Edibles Factory could increase operating income if chocolate-powder liquor base is further processed into chocolate powder and if milk-chocolate liquor base is further processed into milk chocolate. The Rich and Creamy Edibles Factory manufactures and distributes chocolate products. (Click the icon to view more information about Rich and Creamy.) Production and sales data for August 2017 are as follows (assume no beginning inventory): (Click the icon to view the data.) Read the requirements Requirement 1. Calculate how the joint costs of $70,000 would be allocated between chocolate powder and milk chocolate under the different methods. a. Sales value at splitoff method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places.) More Info Joint costs Sales value of total production at splitoff allocated Chocolate powder Milk chocolate Weighting .4286 -5714 30000 40000 70.000 It purchases cocoa beans and processes them into two intermediate products: chocolate powder liquor base and milk-chocolate liquor base. These two intermediate products become separately identifiable at a single splitoff point. Every 600 pounds of cocoa beans yields 20 gallons of chocolate-powder liquor base and 60 gallons of milk-chocolate liquor base. 1.0000 Total b. Allocate the joint costs using the physical measure method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places.) The chocolate-powder liquor base is further processed into chocolate powder. Every 20 gallons of chocolate-powder liquor base yield 680 pounds of chocolate powder. The milk-chocolate liquor base is further processed into milk chocolate. Every 60 gallons of milk-chocolate liquor base yield 1.100 pounds of milk chocolate. Physical measure of total production Joint costs allocated $ 17.500 Chocolate powder Milk chocolate Weighting 0.2500 0.7500 1.0000 52.500 Print Done $ 70.000 Total c. Allocate the joint costs using the net realizable value method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the weighting amounts to four decimal places. Round the joint costs allocated to the nearest whole dollar.) i More Info Net realizable value 204 205 400.315 Chocolate powder Joint costs Weighting allocated 0.3378 5 23.646 0.6622 46355 1.0000 70,000 Milk chocolate 604.520 Total . Cocoa beans processed. 27.600 pounds . Costs of processing cocoa beans to splitoff point (including purchase of beans). $70,000 Separable Production Sales Selling Price Processing Costs Chocolate powder 31,280 pounds 6.800 pounds $8 per pound $ 46,035 Milk chocolate 50.600 pounds 14,400 pounds $9 per pound $ 55,085 Rich and Creamy Edibles Factory fully processes both of its intermediate products into chocolate powder or milk chocolate. There is an active market for these intermediate products. In August 2017, Rich and Creamy Edibles Factory could have sold the chocolate powder liquor base for $21 a gallon and the milk-chocolate liquor base for $28 a gallon. d. Constant gross-margin percentage NRV method. Begin by entering the appropriate amounts to allocate the joint costs. (Round the percentage to four decimal places, X.XXXX%.) The overall gross-margin percentage for all joint products together is .7575 %. Now determine the formula to compute the joint costs allocated, then enter the appropriate amounts. (Round your answers to the nearest whole dollar.) Revenue . Gross margin = Joint costs allocated Chocolate powder 204205 - 23646 = 180559 Milk chocolate 400315 - 46355 = 353961 Print Done Requirement 2. Could Rich and Creamy Edibles Factory have increased its operating income by a change in its decision to fully process both of its intermediate products? Show your computations. (Use parentheses or a minus sign when entering decreasing amounts.) Begin by determining the formula to compute the increase/(decrease) in operating income, then enter the appropriate amounts. Increase/(decrease) in operating income Incremental revenue = Chocolate powder Milk chocolate Rich and Creamy Edibles Factory could increase operating income if chocolate-powder liquor base is further processed into chocolate powder and if milk-chocolate liquor base is further processed into milk chocolate