Dinesh QS 23-7 (Algo) Sell or process LO P2Holmes Company has already spent $96,000 to harvest peanuts. Those peanuts can be sold as is for $85,500. Alternatively, Holmescan process further into peanut butter at an additional cost of $548,625. if Holmes processes further, the peanut butter can be sold for$914,375.(a) Prepare a sell as is or process further analysis of income effects.(b) Should Holmes sell as is or process further?(a) Sell or Process AnalysisRevenueCostsIncome(b) The company should:Sell as is Process Further

Incremental Analysis :— This analysis shows the comparison between two different alternatives. A…

Answered: QS 23-7 (Algo) Sell or process LO P2…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 5BE

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QS 23-3 (Algo) Identifying relevant costs LO C1 Zycon has produced 8,000 units of raw milk at a $16,000 cost. These units can be sold as is to another manufacturer for $9,600. Instead, Zycon can process the units further and produce yogurt. Processing further will cost an additional $12,800 and will yield revenues of $24,000. Identify whether each of the following is relevant or not relevant to the sell or process further decision. Item a. $16,000 cost already incurred to produce milk b. $9,600 selling price for milk as is c. $12,800 further processing costs d. $24,000 revenue from further processing
Sell or process further Calgary Lumber Company incurs a cost of 315 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells for 440 per hbf. An alternative is to produce a finished cut at a total processing cost of 465 per hbf, which can be sold for 600 per hbf. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Q2 Joint cost allocation: sell immediately or process further. Iowa Soy Products (ISP) buys soy beans and processes them into other soy products. Each ton of soy beans that ISP purchases for $300 can be converted for an additional $200 (joint cost) into 500 pounds of soy meal and 100 gallons of soy oil. 1 ton = 2000 pound A pound of soy meal can be sold at split off for $1 and soy oil can be sold in bulk for $4 per gallon. ISP can process the 500 pounds of soy meal into 600 pounds of soy cookies at an additional cost of $300. Each pound of soy cookies can be sold for $2 per pound. The 100 gallons of soy oil can be packaged at a cost of $200 and sold for $12.5 per gallons. Required 1. Allocate the joint cost to the cookies and the soy oil using the following: a. Sales value at split off method b. NRV method
Exercise 11-42 (Algo) Sell or Process Further: Multiple Choice (LO 11-9) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,280 gallons of Chem-X with a cost of $115,200. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 28,160 $ 20.00 $ 16.00 $ 20.00 M-20 17,920 $ 24.00 $ 4.00 $ 44.00 B-60 6,400 $ 0.50 NA NA Oak View Chemicals uses the physical quantities method to allocate joint costs and the revenues from by-products are credited to joint costs. Required: Under these assumptions, the following product(s) should be processed further and then sold: Multiple Choice M-20 M-10 Cannot tell from the…
Problem 7: How much joint cost is allocated to Product X if joint cost is allocated using the market value method? * SAMCIS Company produces three products (X, Y, and Z) in a joint process costing P100,000. The products can be sold as they leave the process, or they can be processed further and sold. The cost accountant has provided you with the following information: Sales Price After Further Processing Separable Further Processing Costs P60,000 50,000 Sales Price Product Unit Volume at Split-Off P25 30 35\ P10 3,000 4,000 8,000 Y. 15 20 90,000 Assume that all processing costs are variable costs
Relevant costs for decision making Cipla Uganda pharmaceutical company, buys a chemical for $10,000, which it breaks down into two components: Component Sales value ($) Allocated costs ($) A 8,000 7,000 B 4,000 5,000 Component A can be converted into Product A if $6,000 is spent on further processing. Product A would sell for $12,000. Component B can be converted into Product B if $10,000 is spent on further processing. Product B would sell for $17,000. Required; What processing decision should Cipla make in order to maximize profits? Illustrate the production plan to show the contribution margin.
2. Nando Company manufactures 3 products, A, B, and C, by the same production process which costs $100,000. Each product could be sold at split off or processed further and sold at a higher price. product Selling Price at Split Off Selling Price After Processed Additional Processing Costs A $60000 $190000 $100000 B $15000 $35000 $30000 C $55000 $215000 $150000 a. Determine the total net income if all products are sold at the split off point. b. Determine the total net income if all products are sold after further processing. c. Which product should be processed further and which product should not? Provide the incremental analysis for your answer.
Exercise 11-41 (Algo) Net Realizable Value Method: Multiple Choice (LO 11-7) Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a single input, Chem-X. Products M-10 and M-20 can either be sold at split-off or processed further and sold. A given batch begins with 1,140 gallons of Chem-X with a cost of $102,600. Additional information regarding a batch follows. If Processed Further Product Units Produced Unit Sales Value at Split-off Additional Costs (Per Unit) Sales Value (Per Unit) M-10 25,080 $ 5.00 $ 2.00 $ 6.00 M-20 15,960 $ 10.00 $ 4.00 $ 16.00 B-60 5,700 $ 0.50 NA NA Oak View Chemicals uses the net realizable at split-off approach to allocate joint costs and treats the sales value of the by-product B-60 as other income. Required: The joint cost allocated to product M-10 at Oak View Chemicals for a given batch is Multiple Choice $62,700 $45,144 $43,890…
Problem 6 Lucille Inc manufactures a product that gives rise to a by-product called “Robon”. The only cost associated with Robon are additional processing cost of P1.00 for each unit. Lucille accounts for Robon sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. For the past year, 2,000 units of Robon were produced which were sold for P3.00 each. Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively. If Lucille changes its method of accounting for Roblon sales by showing the net amount as “other income”, the effect on gross margin would be (increase of decrease of what amount?)
Problem 6 Lucille Inc manufactures a product that gives rise to a by-product called “Robon”. The only cost associated with Robon are additional processing cost of P1.00 for each unit. Lucille accounts for Robon sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. For the past year, 2,000 units of Robon were produced which were sold for P3.00 each. Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively. The gross margin after considering the by-product sales and costs would be
Question Feip Suppose that a manufacturer can produce a part for $9.00 with a fixed cost of $5,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $11.00, which includes transportation. a. If the anticipated production volume is 1,500 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision? a. The total cost of manufacturing is $ (Simplify your answer.) PI ry sit nas mu Enter your answer in the answer box and then click Check Answer. parts remaining Check Answer Clear All Type here to search
Product b) Chocfee Dairy Ltd gathered this data for two of its Current Sales Additional Processing Value Sales Value if Costs Coffee beans $ 8.000 000 Chocolate malt $ 5.000 000 Processed Further $ 3.000 products that it produces: $ 2 000 Required: Which of the products should be processed further? ANSWER b): $10 $7

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