Jackson Flocks Inc. processes Turkeys into four products


Jackson Flocks Inc. processes Turkeys into four products for sale on the wholesale market:

Breasts
Smoked legs and thighs
Whole Turkeys
Necks and wings for soup

The costs to get the products to the point where they can be separately identified total $10,000,000. Additional Information follows:

Product
Lbs. Produced
Cost after split-off
Selling price per pound
Breasts

1,000,000

$200,000

$2

Smoked legs and thighs

2,500,000

500,000

4

Whole Turkeys

2,000,000

425,000

3

Necks and wings

500,000

350,000

5

Feathers are sold at the split-off point as a by-product for $1,000,000 which lower the joint costs allocated.

Based on the information given for Jackson Flocks:

  1. Prepare an analysis for Jackson Flocks that compares processing the smoked legs and thighs further, as it currently does, with selling them as a product immediately at split-off.
  2. #2





    UnitsDollars
    Monthly unit output 2,500,000.00 $               4,500,000.00
    Sales Price
     $             10,000,000.00
    Less: NRV Sales value at splitoff
     $              (9,500,000.00)
    Incremental revenue
     $                  500,000.00
    Less: Further processing costs
     $                 (500,000.00)
    Additional contribution from further processing





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