1.Instant Foods produces two types of microwavable productsbeef-flavored ramen and shrimp-flavored ramen. The two products share common...
Question:
1.Instant Foods produces two types of microwavable productsbeef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste
product referred to as stock, which Instant dumps at negligible costs in a local drainage area. In June 2018, the following data were reported for the production and sales of beef-flavored and shrimp-flavored ramen:
Joint costs
Joint Costs (costs of noodles, spices, and other inputs and processing to splitoff point)
$240,000
Beef Ramen
Shrimp Ramen
Beginning inventory (tons)
0
0
Production (tons)
10,000
20,000
Sales (tons)
10,000
20,000
Selling price per ton
$10
$15
Due to the popularity of its microwavable products, Instant decides to add a new line of products that targets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. The following is the monthly data for all the products:
Joint costs
Special B
Special S
Joint Costs (costs of noodles, spices, and other inputs and processing to splitoff point)
$240,000
Separable costs of processing 10,000 tons of Beef Ramen into 12,000 tons of Special B
48,000
Separable cost of processing 20,000 tons of Shrimp Ramen into 24,000 tons of Special S
168,000
Transfer for further processing (tons)
Beef Ramen
Shrimp Ramen
Special B
Special S
Beginning inventory (tons)
0
0
0
0
Production (tons)
10,000
20,000
12,000
24,000
10,000
20,000
Sales (tons)
12,000
24,000
Selling price per ton
$10
$15
$18
$25
1.Allocate the joint costs of $240,000 between Beef Ramen and Shrimp Ramen under
(a) the sales value at split-off method (1 pt)
(b) the physical-measure method. (1pt)
2.Allocate the joint costs of $240,000 between Special B and Special S under the NRV method. (1pt)
Expert Answer:
1 Allocation of Joint Costs between Beef Ramen and Shrimp Ramen a Sales Value at Splitoff Method Total Sales Value at Splitoff 10 10000 tons 15 20000 ... View the full answer
