Business, 24.03.2021 22:30 daijafoster0

Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 20,000 pounds of apples is as follows: Assume that Orchard Fresh, Inc., uses the sales-value-at-split-off method of joint cost allocation and has provided the following information about the four grades of apples: Grades Pounds Price at Split-Off(per Ib.)
Grade A $1,600 $4.00
Grade B $5,000 1.00
Splices $8,000 0.50
Applesauce $5,400 0.10
Total $20,000
Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of apples using the sales-value-at-split-off method.
2. What if the price at split-off of Grade B apples increased to $1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of cost to the remaining grades?

Answers: 2

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Answer from: 2016gbryant

Orchard Fresh, Inc.

1. Allocation of the joint cost to the four grades of apples using the sales-value-at-split-off method:

Total joint cost allocation rate is $18,000/$20,000 = $0.90

Grade A $1,600 * $0.90 = $1,440

Grade B $5,000 * $0.90 = $4,500

Splices $8,000 * $0.90 = $7,200

Applesauce $5,400 * $0.90 = $4,860

Total allocated costs $18,000

2. When Grades B apples price increased to $1.20 per pound:

Total joint cost allocation rate is $18,000/$21,000 = $0.857

Grade A $1,600 * $0.857 = $1,371

Grade B $6,000 * $0.857 = $5,142

Splices $8,000 * $0.857 = $6,856

Applesauce $5,400 * $0.857 = $4,628

Total allocated costs $17,997

Explanation:

a) Data and Calculations:

Grades Pounds Total costs Price at Split-

Off(per Ib.)

Grade A 400 $1,600 $4.00

Grade B 5,000 $5,000 1.00

Splices 16,000 $8,000 0.50

Applesauce 54,000 $5,400 0.10

Total $20,000

Joint cost = $18,000

Allocation of joint costs:

Total joint cost is $18,000/$20,000 = $0.90

Grade A $1,600 * $0.90 = $1,440

Grade B $5,000 * $0.90 = $4,500

Splices $8,000 * $0.90 = $7,200

Applesauce $5,400 * $0.90 = $4,860

Total allocated costs $18,000

Total joint cost is $18,000/$21,000 = $0.857

Grade A $1,600 * $0.857 = $1,371

Grade B $6,000 * $0.857 = $5,142

Splices $8,000 * $0.857 = $6,856

Applesauce $5,400 * $0.857 = $4,628

Total allocated costs $17,997

Answer from: Quest

C. piggy bankbecause everything has interest rates over a period of time whereas a personal keeping of money has no other interaction therefore no interest rates.
Which of the following will typically offer zero interest rate?

Which of the following will typically offer zero interest rate?

Answer from: Quest

15 1/2 years old in california

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Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade...