question 12:

part 1 & 2

Required information [The following information applies to the questions displayed below.] California Orchards reports the following sales data for the year ended December 31. The company incurred the following joint costs for the year. Required: 1. Use the value basis to allocate joint costs to the three grades of walnuts on the basis of sales value. 2. Compute gross profit for each of the three grades of walnuts. Assume, cost of goods sold consists only of the joint costs. Hip Manufacturing produces denim clothing. This year it produced 3,340 denim jackets at a cost of $100,200. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $20,040. 2. Jackets can be disassembled at a cost of $6,680 and sold to a recycler for $40,080. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $113,560, and the jackets can then be sold for $150,300. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen