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Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each tonne of soy beans that SSP purchases for $300

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Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each tonne of soy beans that SSP purchases for $300 can be converted for an additional $200 into 500 lbs of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1, and soy oil can be sold in bulk for $4 per gallon. SSP can process the 500 lbs of soy meal into 600 lbs of soy cookies at an additional cost of $300. Each pound of soy cookies can be sold for $2 per pound. The 100 gallons of soy oil can be packaged at a cost of $200 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for $1.25. Required 1. Allocate the joint cost to the cookies and the Soyola using: a. Sales value at splitoff method b. NRV method 2. Should the company have processed each of the products further? What effect does the allocation method have on this decision?

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Joint Cost Allocation Saskatchewan Soy Products SSP incurs a joint cost of 300 to process a tonne of soybeans into 500 lbs of soy meal and 100 gallons of soy oilThe company can further process these p... blur-text-image

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