The Cocoa Division of BonBon Chocolate Company processes fermented cocoa beans into refined cocoa, cocoa butter...

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The Cocoa Division of BonBon Chocolate Company processes fermented cocoa beans into refined cocoa, cocoa butter and dried pod husks. The cost to purchase, ferment and process the cocoa beans is $75,000. The net realizable value of the joint products are; $85,000 for refined cocoa and $60,000 for cocoa butter. The dried pod husks are a by-product used for cattle feed with a net realizable value of $5,000. All the refined cocoa and cocoa butter has been sold; however, none of the dried pod husks have sold in the current year. W. Wonka, the manager of the Cocoa Division receives an annual bonus which is a percentage of profits for the current year. He wants to maximize his bonus for the current year as he plans on taking a job with the competition in the coming year. Required: Which treatment of by product costing (Sales or Production Method) would W. Wonka prefer? Provide calculations to support your decision and explain why the method you chose achieves this. (4 marks) ACCT 3420 Assignment Week 10/11 Omega Company manufactures three milk products in a joint process. The manufacturing costs of the joint process include $35,000 of raw milk and $25,000 of conversion costs. Instead of selling the products at split-off, the company's cost accountant advised the production manager to process all three products further before they are sold. Other pertinent data is as follows: Products 2% Milk 10% Creamer Whipping cream Sales value at splitoff Separable costs Final sales value $50,000 $28,000 $100,000 40,000 10,000 60,000 30,000 12,000 40,000 Required: You have been hired as an outside consultant to the company president. The president wants you to assess Omega's profitability. What advice would you give in relation to Omega's current production practices? Provide calculations to back your discussion. (4 marks) 61 Page The Cocoa Division of BonBon Chocolate Company processes fermented cocoa beans into refined cocoa, cocoa butter and dried pod husks. The cost to purchase, ferment and process the cocoa beans is $75,000. The net realizable value of the joint products are; $85,000 for refined cocoa and $60,000 for cocoa butter. The dried pod husks are a by-product used for cattle feed with a net realizable value of $5,000. All the refined cocoa and cocoa butter has been sold; however, none of the dried pod husks have sold in the current year. W. Wonka, the manager of the Cocoa Division receives an annual bonus which is a percentage of profits for the current year. He wants to maximize his bonus for the current year as he plans on taking a job with the competition in the coming year. Required: Which treatment of by product costing (Sales or Production Method) would W. Wonka prefer? Provide calculations to support your decision and explain why the method you chose achieves this. (4 marks) ACCT 3420 Assignment Week 10/11 Omega Company manufactures three milk products in a joint process. The manufacturing costs of the joint process include $35,000 of raw milk and $25,000 of conversion costs. Instead of selling the products at split-off, the company's cost accountant advised the production manager to process all three products further before they are sold. Other pertinent data is as follows: Products 2% Milk 10% Creamer Whipping cream Sales value at splitoff Separable costs Final sales value $50,000 $28,000 $100,000 40,000 10,000 60,000 30,000 12,000 40,000 Required: You have been hired as an outside consultant to the company president. The president wants you to assess Omega's profitability. What advice would you give in relation to Omega's current production practices? Provide calculations to back your discussion. (4 marks) 61 Page

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To determine which treatment of byproduct costing Sales or Production Method W Wonka would prefer we ... View the full answer