THIS IS ALL I HAVE

QUALITY Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July is as follows.

Joint cost of production in July was$60.

A special shipment of 60 kilograms of breasts and 20 kilograms of wings has been destroyed in a fire.

Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint cost allocation method. The splitoff point is assumed to be at the end of the production process.

1.	Calculate the cost of the special shipment destroyed using a. Sales value at splitoff method b. Physical measure method (kilograms of finished product)
2.	What joint cost allocation method would you recommend Quality Chicken use? Explain.

\begin{tabular}{|c|c|c|c|c|c|c|} \hline & Breasts & Wings & Thighs & Bones & Feathers & Total \\ \hline Kilograms of product & 105 & 25 & 40 & 70 & 5 & 245 \\ \hline \begin{tabular}{l} Wholesale selling price \\ per kilogram \end{tabular} & 0.65 & 0.25 & 0.40 & 0.10 & 0.05 & \\ \hline Sales value at splitoff & 68.25 & 6.25 & 16 & 7 & 0.25 & 97.75 \\ \hline \begin{tabular}{l} Neighting: Sales value at \\ splitoff \end{tabular} & 0.70 & 0.06 & 0.16 & 0.07 & 0.00 & 1 \\ \hline int costs allocated & 42 & 3.6 & 9.6 & 4.2 & 0 & 60 \\ \hline \begin{tabular}{l} llocated costs per \\ logram \end{tabular} & & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline Parts & \begin{tabular}{c} Kilograms of \\ Product \end{tabular} & \begin{tabular}{c} Wholesale Selling Price \\ Kilogram when Produc \\ Is Complete \end{tabular} \\ \hline Breasts & 105 & 0.65 \\ \hline Wings & 25 & 0.25 \\ \hline Thighs & 40 & 0.40 \\ \hline Bones & 70 & 0.10 \\ \hline Feathers & 5 & 0.05 \\ \hline \end{tabular}