Treaty Treat, Inc., purchases soybeans and processes them into the following three types of products: dog biscuits, cat food, and chicken feed. These products are the result of a joint process. In a typical month, there are total joint costs of $191,000. The dog biscuits and chicken feed are sold after being pressed into various shapes without further processing by TreatyTreat. (i.e. the fully- processed sales price is the same as the sales price at the point of split-off.) The cat food must be further mixed with vitamins. If the cat food spoils during the vitamin-adding process, the product can still be sold for fertilizer at $2.70 per unit. (Hint, this would be the sales value of the cat food at the split-off point.) The additional processing of cat food costs TreatyTreat $13,700 per month. Product yield and average sales value on a per-unit basis from the joint processes are as follows: Monthly Fully Processed Sales Price $9 Product Dog Biscuits Cat Food Chicken Feed Output 53,000 52,000 38,000 7 5 Determine the allocated costs for cat food using the estimated net realizable value method.

Treaty Treat, Inc., purchases soybeans and processes them into the following three types of products: dog biscuits, cat food, and chicken feed. These products are the result of a joint process. In a typical month, there are total joint costs of $191,000. The dog biscuits and chicken feed are sold after being pressed into various shapes without further processing by TreatyTreat. (i.e. the fully- processed sales price is the same as the sales price at the point of split-off.) The cat food must be further mixed with vitamins. If the cat food spoils during the vitamin-adding process, the product can still be sold for fertilizer at $2.70 per unit. (Hint, this would be the sales value of the cat food at the split-off point.) The additional processing of cat food costs TreatyTreat $13,700 per month. Product yield and average sales value on a per-unit basis from the joint processes are as follows: Monthly Fully Processed Sales Price $9 Product Dog Biscuits Cat Food Chicken Feed Output 53,000 52,000 38,000 7 5 Determine the allocated costs for cat food using the estimated net realizable value method.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 13E: Carleigh, Inc., is a pork processor. Its plants, located in the Midwest, produce several products...

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