Flori-Dante Srl grows, processes, packages and sells three joint apple products: (a) sliced apples that are used
Question:
¢ The apples are washed and the peel is removed in the Cutting Department. The apples are then cored and trimmed for slicing. The three joint products and the by-product are recognizable after processing in the Cutting Department. Each product is then transferred to a separate department for final processing.
¢ The trimmed apples are forwarded to the Slicing Department, where they are sliced and frozen. Any juice generated during the slicing operation is frozen with the apple slices.
¢ The pieces of apple trimmed from the fruit are processed into apple sauce in the Crushing Department. The juice generated during this operation is used in the apple sauce.
¢ The core and any surplus apple pieces generated from the Cutting Department are pulverized into a liquid in the Juicing Department. There is a loss equal to 8% of the weight of the good output produced in this department.
¢ The peel is chopped into animal feed and packaged in the Feed Department. It can be kept in cold storage until needed.
A total of 270 000 kg of apples were entered into the Cutting Department during November. The following schedule shows the costs incurred in each department, the proportion by weight transferred to the four final processing departments and the selling price of each end-product.
Processing data and costs November 2007
Required
1. Flori-Dante uses the estimated NRV method to determine stock cost of its joint products; by-products are reported on the balance sheet at their selling price when produced. For the month of November 2007, calculate the following:
a. The output for apple slices, apple sauce, apple juice and animal feed, in kilograms.
b. The estimated NRV at the split-off point for each of the three joint products.
c. The amount of the cost of the Cutting Department assigned to each of the three joint products and the amount assigned to the by-product in accordance with corporate policy.
d. The gross margins in euros for each of the three joint products.
2. Comment on the significance to management of the gross-margin monetary information by joint product for planning and control purposes, as opposed to stock-costing purposes.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Management and Cost Accounting
ISBN: 978-1405888202
4th edition
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster