Georgette Rheingold owns and operates a fruit smoothie manufacturing operation, Nutri-smoothie. She processes fruit and adds it

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Georgette Rheingold owns and operates a fruit smoothie manufacturing operation, Nutri-smoothie. She processes fruit and adds it to yogurt and produces fruit smoothies, the main product. She sells the rinds and other waste to a recycling organization that turns the waste into compost. Neither product requires processing after the split-off point. Information for last month's operations follows:
Joint costs of smoothie production ...........................$12,000
Smoothie production (in ½ L bottles) .........................20,000
Price per bottle ........................................................$2
Sales last month (bottles) .......................................18,000
Compost production .........................................10,000 kg
Compost sales ..................................................8,000 kg
Compost revenue ................................................$2,000
REQUIRED
A. What is Nutri-smoothie's gross margin for last month if the by-product value is recognized at the time of production?
B. What is Nutri-smoothie's gross margin for last month if the by-product value is recognized at the time of sale?
C. Calculate the inventory value for both smoothies and compost on the balance sheet under the methods used in Parts A and B.
Balance Sheet
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...
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Cost Management Measuring Monitoring And Motivating Performance

ISBN: 9781118168875

2nd Canadian Edition

Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook

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