.How much of the joint cost of the apples is allocated to the pulp? 2.Compute the total inventory cost (and therefore the cost of goods sold) for the pulp. 3.Assume that $130,000 was spent to press the apples and $150,000 was spent to filter, pasteurize, and pack the apple juice. Compute the total inventory cost of the apple juice produced
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The Vernon Company buys apples from local orchards and presses them to produce apple juice. The pulp that remains after pressing is sold to farmers as livestock food. This livestock food is accounted for as a by-product.
During the 2012 fiscal year, the company paid $1,000,000 to purchase 8 million kilograms of apples. After processing, 1 million kilograms of pulp remained. Vernon spent $35,000 to package and ship the pulp, which was sold for $50,000.
1.How much of the joint cost of the apples is allocated to the pulp?
2.Compute the total inventory cost (and therefore the cost of goods sold) for the pulp.
3.Assume that $130,000 was spent to press the apples and $150,000 was spent to filter, pasteurize, and pack the apple juice. Compute the total inventory cost of the apple juice produced.
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- Whispering Winds's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree-lot operators. It normally takes 12 years for a tree to grow to a suitable size, and the average selling price of a tree is $29. The biggest costs to the business are pest control, fertilizer, and pruning trees over the 12-year period. These costs average $12 per tree (assume these are incurred evenly over the 12-year growing cycle). Assume IFRS is used. Assume that the fair value less cost to sell (net realizable value) at the end of 2020 is $12 and the opening value was $7. Assume that the cost to sell are nil. Prepare the journal entries if the costs are capitalized each year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O…Garcia Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $2 each or it can repair the units at a total cost of $18,000 and then sell them for $5 each. Should Garcia sell the units as is or repair them and then sell them?Fruit-To-Go (FTG) processes fruit for shipping overseas. FTG commissioned a study to look into the feasibility of changing the packaging of the fruit from cans to sealed bags. The Consultant charged $54,000 for the report.The report concluded that the new packaging will increase sales and reduce some operating costs. The new packaging machinery will cost $1,100,000. The new machine is expected to last 5 years. The Taxation Office advise the life of the machine, for tax purposes, is 4 years. The old canning machinery was purchased 2 years ago for $800,000 and was being depreciated at $200,000 and will be for the next 2 years. The old machine could be sold today for $260,000. In 5 years it will be worth nothing. Installing the new machine will require staff training (a tax deductible expense) of $35,000 before production can commence. Due to the lower cost of the bags Inventory required will be reduced by $80,000 for the life of the project. The new sales of bagged fruit is…
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- Fruit-To-Go (FTG) processes fruit for shipping overseas. FTG commissioned a study to look into the feasibility of changing the packaging of the fruit from cans to sealed bags. The Consultant charged $54,000 for the report.The report concluded that the new packaging will increase sales and reduce some operating costs. The new packaging machinery will cost $1,100,000. The new machine is expected to last 5 years. The Taxation Office advise the life of the machine, for tax purposes, is 4 years. The old canning machinery was purchased 2 years ago for $800,000 and was being depreciated at $200,000 and will be for the next 2 years. The old machine could be sold today for $260,000. In 5 years it will be worth nothing. Installing the new machine will require staff training (a tax deductible expense) of $35,000 before production can commence. Due to the lower cost of the bags Inventory required will be reduced by $80,000 for the life of the project. The new sales of bagged fruit is…BT&T Corporation manufactures telephones. Recently , the company produced a batch of 600 defective telephones at a cost of $9,000. BT &T can sell these telephones as scrap for $9 each. It can also rework the entire batch at a cost of $6,500 , after which the telephones could be sold for $20 per unit. If BT&T reworks the defective telephones , by how much will its operating income change ?Fruit-To-Go (FTG) processes fruit for shipping overseas. FTG commissioned a study to look into the feasibility of changing the packaging of the fruit from cans to sealed bags. The Consultant charged $54,000 for the report. The report concluded that the new packaging will increase sales and reduce some operating costs. The new packaging machinery will cost $1,100,000. The new machine is expected to last 5 years. The Taxation Office advise the life of the machine, for tax purposes, is 4 years. The old canning machinery was purchased 2 years ago for $800,000 and was being depreciated at The old canning machinery was purchased 2 years ago for $800,000 and was being depreciated at $200,000 and will be for the next 2 years. The old machine could be sold today for $260,000. In 5 years it will be worth nothing. Installing the new machine will require staff training (a tax deductible expense) of $35,000 before production can commence. Due to the lower cost of the bags Inventory required…
- Basuras Waste Disposal Company has a long-term contract with several large cities to collect garbage and trash from residential customers. To facilitate the collection, Basuras places a large plastic container with each household. Because of wear and tear, growth, and other factors, Basuras places about 200,000 new containers each year (about 20% of the total households). Several years ago, Basuras decided to manufacture its own containers as a cost-saving measure. A strategically located plant involved in this type of manufacturing was acquired. To help ensure cost efficiency, a standard cost system was installed in the plant. The following standards have been established for the products variable inputs: During the first week in January, Basuras had the following actual results: The purchasing agent located a new source of slightly higher-quality plastic, and this material was used during the first week in January. 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Sales volume averages 20,000 units per year in each plant. Recently, the Kansas City plant reduced the price of the tilt model to 1,440. Discussion with the Kansas City manager revealed that the price reduction was possible because the plant had reduced its manufacturing and selling costs by reducing what was called non-value-added costs. The Kansas City manufacturing and selling costs for the tilt model were 1,260 per unit. The Kansas City manager offered to loan the Tulsa plant his cost accounting manager to help it achieve similar results. The Tulsa plant manager readily agreed, knowing that his plant must keep pacenot only with the Kansas City plant but also with competitors. A local competitor had also reduced its price on a similar model, and Tulsas marketing manager had indicated that the price must be matched or sales would drop dramatically. 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