Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The South Oil Company buys crude vegetable oil. Refining this oll results in four products at the splitoff point. A, B, C, and D. Product

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The South Oil Company buys crude vegetable oil. Refining this oll results in four products at the splitoff point. A, B, C, and D. Product C is fully processed by the splitoff point. Products A,B, and D can individually be further refined into Super A, Super B, and Super D. In the most recent month (December). the output at the splitoff point was as follows: 2. (Click the icon to view the information.) Read the requirements. Requirement 1. Compute the gross-margin percentage for each product sold in December, using the different methods for allocating the $96,000 joint cosis. a. Sales Value at Splitoff. Begin by entering the amounts in the table and allocate the joint costs. (Enter the weights to four decimal places.) Compute the gross margin percentage using the sales value at splitoff method to allocate the joint costs. (Einter a "0' for any cells with a zero balance, Round the percentages to two decimal places, X.X%. Use parentheses or a minus sign when entering negative amounts.) More info - Product A, 322,400 gallons - Product B, 119,600 gallons - Product C, 52,000 gallons - Exroduct D, 26,000 gallons The joint costs of purchasing and processing the crude vegetable oil were $96,000. South had no beginning or ending inventories. Sales of product C in December were $24,000. Products A, B, and D were further refined and then sold. Data related to December are as follows: South had the option of selling products A, B, and D at the splitoff point. This alternative would have yielded the following revenues for the December production: - Product A, $84,000 - Product B, $72,000 - Product D, $60,000 1. Compute the gross-margin percentage for each product sold in December, using the following methods for allocating the $96,000 joint costs: a. Sales value at splitoff b. Physical-measure c. NRV 2. Could South have increased its December operating income by making different decisions about the further processing of products A, B, or D? Show the effect on operating income of any changes you recommend. Compute the gross margin percentage using the sales value at splitoff method to allocate the joint costs, (Enter a "o" for any cetis with a zere balance. Round the percenteges to two decimal places, X.XX\%. Use parentheses or a minus sign when entering neaative amounts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting

Authors: Srivastava Lal, Jawahar Lal

5th Edition

1259026523, 978-1259026522

More Books

Students also viewed these Accounting questions