**Joint Cost Allocation in Poultry Processing****Background:**Choice Chicken grows and processes chickens, disassembling each into five main parts: breast, wings, thighs, bones, and feathers. This information is based on production data from July 2020. **Production Details:**- A joint cost of production in July 2020 was $50.- A special shipment of 60 pounds of breasts and 15 pounds of wings was destroyed in a fire.- Choice Chicken needs to evaluate its financial reporting for this loss, using joint-cost allocation at the time of production.- The split-off point is at the end of the production process.**Table Explanation:**The table is designed to complete joint cost allocation using the sales value at the split-off method. Each product type has a wholesale selling price per pound allocated for computation.- **Products and Prices per Pound:** - Breast: $0.45 - Wings: $0.25 - Thighs: $0.35 - Bones: $0.05 - Feathers: $0.05- **Weights (in pounds):** - Breast: 100 - Wings: 20 - Thighs: 30 - Bones: 45 - Feathers: 5- **Columns to Compute:** 1. **Sales Value at Splitoff:** - Calculate by multiplying the weight of each part by its price per pound. 2. **Weighting:** - Express each product's sales value as a proportion of the total sales value. 3. **Joint Costs Allocated per Sales Value:** - Allocate the joint costs ($50) based on weighted proportions.**Requirements for Completion:**1. **Cost Computation:** - Calculate the cost of the special shipment destroyed using the sales value method. - Present values rounded according to provided instructions.2. **Allocation Method Recommendation:** - Recommend a joint-cost allocation method for Choice Chicken, explaining your reasoning.**Actionable Items:**- Use the table to perform calculations.- Review Requirements section for guidance on completion.- Complete by filling all necessary values following rounding instructions.This module helps understand joint cost allocation, a critical accounting practice, especially in scenarios with by-products or diversified outputs. ## Data Table OverviewThe table provides detailed information on various parts of a product, measured in pounds, and their corresponding wholesale selling prices per pound once production is complete.### Table Columns:1. **Parts**: This column lists the different parts of the product. The parts included are: - Breasts - Wings - Thighs - Bones - Feathers2. **Pounds of Product**: This column indicates the total weight in pounds for each part of the product. - Breasts: 100 pounds - Wings: 20 pounds - Thighs: 30 pounds - Bones: 45 pounds - Feathers: 5 pounds3. **Wholesale Selling Price per Pound When Production is Complete**: This column shows the selling price for each pound of the product part at the wholesale level. - Breasts: $0.45 per pound - Wings: $0.25 per pound - Thighs: $0.35 per pound - Bones: $0.05 per pound - Feathers: $0.05 per poundThis data can be useful for understanding the distribution of different product parts and their market value after processing.

The methods of joint cost allocation in cost accounting are the split-off method and Physical…

Choice Chioren grows and processes chioens. Each chicken is disassembled into five main parts. Information Aspecial shipment of 60 pounds of breasts and 15 pounds of wings has been destroyed in a fre Choice Chices insurance policy provides reimbursement for the cost of the tems destroyed The insurance company permts Choice Chicken to use a joint-cost-alocation method. The spitof point is assumed to be at the end of he production process. Read the ta M (Cick the icon to view the intormation) Joint cost of production in aay 2020 was S50 Requirement ta. Compute the cost of the special shipment destroyed using the sales value at spitot method Complete the tabie below to assist you. (Round the weighting to three decimal places and the alocated costs per pound to four decimal places. Round al other amounts to the nearest cent) Breast Wings Thighs lones Feathers Total Pounds of product 100 20 30 45 Wholesae seing price per pound 045 025 035 0 05 S 0.05 Requirements Sales value at spitot Weighting Se value 1. Compute the cost of the special shpment detroyed using the folowing A Sales value at spitot method D. Physicalmeasure method poundi of tnshed product 2. What joint-cost-alocation method would you recommend Choice Chicken use? Expiain at spito Joint costs alocated Alocated costs per pound Print Done

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q