Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 9EB
Beretti’s Food Mart has 6,000 pounds of raw pork nearing its expiration date. Each pound has a cost of $5.50. The pork could be sold as is” for $2.50 per pound to the dog food processing plant, or it could be made into custom Italian sausage and sold in the meat department. The cost of the sausage making is
$3.00 per pound and each pound could be sold for $7.50. What should be done with the pork and why?
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Beretti’s Food Mart has 6,000 pounds of raw pork nearing its expiration date. Each pound has a cost of $5.50. The pork could be sold “as is” for $2.50 per pound to the dog food processing plant, or it could be made into custom Italian sausage and sold in the meat department. The cost of the sausage making is $3.00 per pound and each pound could be sold for $7.50.
What should be done with the pork and why?
Underground Food Store has 4,000 pounds of raw beef nearing its expiration date. Each pound has a cost of $4.50. The beef could be sold “as is” for $3.00 per pound to the dog food processing plant, or roasted and sold in the deli. The cost of roasting the beef will be $2.80 per pound, and each pound could be sold for $6.50.
A) What is the gross profit/loss per pound if the raw beef is sold "as is" to the dog food processing plant? If it is negative, use a dash - not parentheses ( ).
B) What is the gross profit/loss per pound if the raw beef is roasted and sold in the deli? If it is negative, use a dash - not parentheses ( ).
C) Should the beef be sold "as is" or roasted and sold in the deli?
The Olde Town Microbrewery makes Townside beer,which it bottles and sells in its adjoining restaurant and bythe case. It costs $1700 to set up, brew, and bottle a batchof the beer. The annual cost to store the beer in inventory is$1.25 per bottle. The annual demand for the beer is 21,000bottles and the brewery has the capacity to produce 30,000bottles annually.
a. Determine the optimal order quantity, total annual inven-tory cost, the number of production runs per year, and
the maximum inventory level.b. If the microbrewery has only enough storage space tohold a maximum of 2500 bottles of beer in inventory,how will that affect total inventory costs?
Chapter 10 Solutions
Principles of Accounting Volume 2
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