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uality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: (Click
uality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows: (Click the icon to view the information.) Joint cost of production in July 2017 was $40. A special shipment of 70 pounds of breasts and 5 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process. Parts Pounds of Product Wholesale Selling Price per Pound When Production is Complete Breast 90 $ 0.60 Wings 25 0.20 Thighs 35 0.40 Bones Feathers 45 0.15 50 0.05 1. Compute the cost of the special shipment destroyed using the following: a. Sales value at splitoff method b. Physical-measure method (pounds of finished product) 2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain. Requirement 1a. Compute the cost of the special shipment destroyed using the sales value at splitoff method. Complete the table below to assist you. (Round the weighting to three decimal places and the allocated costs per pound to four decimal places. Pounds of product Breast Wings Thighs Bones Feathers Total 90 25 35 45 5 200 Wholesale selling price per pound $ 0.60 $ 0.20 $ 0.40 $ 0.15 $ 0.05 Sales value at splitoff 67.5 6.25 17.5 8.44 .31 100 Weighting: Sales value at splitoff Joint costs allocated Allocated costs per pound 27 2.5 3.38 .13 40
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