Let's start with the joint cleaning and separation process, which allows for the cotton seed and the lint to be separately identifiable. The following quantities of cotton seed and lint were produced for a total cost (including the raw cotton and processing costs) of $232,000. 435,000 pounds of cotton seed 315,000 pounds of lint (fiber) Both of these products can be sold at this point, or they can be processed further. In their present state, they're worth: $0.13 per pound for cotton seed $0.75 per pound for lint This particular company presses the cotton seed to make oil and uses the lint to make thread. The additional costs and processes generate higher sales values for the final products, as follows. Seed/Oil Lint/Thread Additional cost $21,000 Final sales value $84,000 $79,200 $335,000 (b) Allocate the joint process costs using the physical quantities method. (Round proportion to 2 decimal places, e.g. 0.25 and final answers to O decimal places, e.g. 5,125.) Share of joint cost $ Seed $ Lint

Let's start with the joint cleaning and separation process, which allows for the cotton seed and the lint to be separately identifiable. The following quantities of cotton seed and lint were produced for a total cost (including the raw cotton and processing costs) of $232,000. 435,000 pounds of cotton seed 315,000 pounds of lint (fiber) Both of these products can be sold at this point, or they can be processed further. In their present state, they're worth: $0.13 per pound for cotton seed $0.75 per pound for lint This particular company presses the cotton seed to make oil and uses the lint to make thread. The additional costs and processes generate higher sales values for the final products, as follows. Seed/Oil Lint/Thread Additional cost $21,000 Final sales value $84,000 $79,200 $335,000 (b) Allocate the joint process costs using the physical quantities method. (Round proportion to 2 decimal places, e.g. 0.25 and final answers to O decimal places, e.g. 5,125.) Share of joint cost $ Seed $ Lint

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 17E

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