b-2. Calculate the gross margin for each product. (Round your intermediatecalculations and final answers to 2 decimal places.)ChickenChickenDrumsticksBreastRevenueCost of goodssoldGross marginc-1. Should Martin further process chicken breasts into chicken steak? (Use theassumption made in requirement b-1)YesONoc-2. How would the profit be affected by your answer c-1Effect on profit Martin Chicken Corporation processes and packages chicken for grocery stores. Itpurchases chickens from farmers and processes them into two different products:chicken drumsticks and chicken steak. From a standard batch of 12,000 pounds of rawchicken that costs $7,000, the company produces two parts: 2,800 pounds of drumsticksand 4,200 pounds of breast for a processing cost of $2,450. The chicken breast isfurther processed into 3,200 pounds of steak for a processing cost of $2,00o. Themarket price of drumsticks per pound is $1.25 and the market price per pound ofchicken steak is $4.20. If Martin decided to sell chicken breast instead of chicken steak,the price per pound would be $2.20.

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Answered: b-2. Calculate the gross margin for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Atlas Foods produces three supplemental food products simultaneously through a refining process costing $85,000. The joint products, Alfa and Betters, have a final selling price of $8 per pound and $5 per pound, respectively, after additional processing costs of $3 per pound of each product are incurred after the split-off point. Morefeed, a by-product, is sold at the split- off point for $2.50 per pound. Additional information are as follows: Alfa - 15,000 pounds of Alfa, a popular but relatively rare grain supplement of having a caloric value of 8,800 calories/pound. Betters - 5,000 pounds of Betters, a flavouring material high in carbohydrates with a caloric value of 12,000 calories/pound. Morefeed - 2,000 pounds of Morefeed, used as a cattle feed supplement with a caloric value of 1,000 calories/pound. Questions: 1. Assuming Atlas Foods does not inventory Morefeed, the by-product, the joint cost to be allocated to Betters using the net realizable method is?
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Cowboy Ice Cream Company (CIC) produces ice cream bars that it markets through a variety of grocery stores. It makes the ice cream bars in batches of 2,000 units. CIC produced 36,000 ice cream bars during the prior accounting period. The cost of producing the ice cream bars is shown below. Materials cost ($29 per unit x 36,000) Labor cost ($26 per unit x 36,000) Manufacturing supplies ($9 x 36,000) Batch-level costs (18 batches at $6,000 per batch) Product-level costs $1,044,000 936,000 324,000 108,000 300,000 370,000 Facility-level costs Total costs $3,082,000 Cost per unit = $3,082,000 + 36, 000 = $85.61 Required a. OnCue has offered to buy a batch of 500 ice cream bars for $68 each. CIC's normal selling price is $93 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should CIC accept the special order? b. OnCue offered to buy a batch of 2,000 ice cream bars for $68 per unit, calculate the relevant cost per unit for the…
Benson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 14,000 pounds of raw chicken that costs $7,450, the company produces two parts: 2,500 pounds of drumsticks and 4,500 pounds of breast for a processing cost of $2,466. The chicken breast is further processed into 3,700 pounds of steak for a processing cost of $1,700. The market price of drumsticks per pound is $1.40 and the market price per pound of chicken steak is $3.70. If Benson decided to sell chicken breast instead of chicken steak, the price per pound would be $2.20. Required a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base. a-2. Calculate the gross profit for each product. a-3. If the drumsticks are producing a loss, should that product line be eliminated? b-1. Reallocate the joint cost to the…
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