Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 17, Problem 35C
Top Quality Fruit Company, based on Oahu, grows, processes, cans, and sells three main pineapple products: sliced, crushed, and juice. The outside skin is cut off in the Cutting Department and processed as animal feed. The feed is treated as a by-product. The company’s production process is as follows:
- Pineapples first are processed in the Cutting Department. The pineapples are washed and the outside skin is cut away. Then the pineapples are cored and trimmed for slicing. The three main products (sliced, crushed, juice) and the by-product (animal feed) are recognizable after processing in the Cutting Department. Each product then is transferred to a separate department for final processing.
- The trimmed pineapples are sent to the Slicing Department, where the pineapples are sliced and canned. Any juice generated during the slicing operation is packed in the cans with the slices.
- The pieces of pineapple trimmed from the fruit are diced and canned in the Crushing Department. Again, the juice generated during this operation is packed in the can with the crushed pineapple.
- The core and surplus pineapple generated from the Cutting Department are pulverized into a liquid in the Juicing Department. There is an evaporation loss equal to 8 percent of the weight of the good output produced in this department that occurs as the juices are heated.
- The outside skin is chopped into animal feed in the Feed Department.
Top Quality Fruit Company uses the net-realizable-value method to assign the costs of the joint process to its main products. The net realizable value of the by-product is subtracted from the joint cost before the allocation.
A total of 270,000 pounds were entered into the Cutting Department during June. The following schedule shows the costs incurred in each department, the proportion by weight transferred to the four final processing departments, and the selling price of each end product.
Required: Compute each of the following amounts.
- 1. The number of pounds of pineapple that result as output for pineapple slices, crushed pineapple, pineapple juice, and animal feed.
- 2. The net realizable value at the split-off point of the three main products.
- 3. The amount of the cost of the Cutting Department allocated to each of the three main products.
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The Hershey Company manufactures chocolate confectionery products. The three largest raw materials are cocoa, sugar, and dehydrated milk. These raw materials first go into the Blending Department. The blended product is then sent to the Molding Department, where the bars of candy are formed. The candy is then sent to the Packing Department, where the bars are wrapped and boxed. The boxed candy is then sent to the distribution center, where it is eventually sold to food brokers and retailers.Show the accounts debited and credited for each of the following business events:a. Materials used by the Blending Departmentb. Transfer of blended product to the Molding Departmentc. Transfer of chocolate to the Packing Departmentd. Transfer of boxed chocolate to the distribution centere. Sale of boxed chocolate
Mack's Juices produces and bottles a line of fruit juices. The manufacturing process entails mixing and adding juices and other ingredients at the bottling plant, which is a part of Blending Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Mack's developed a unique bottle production process at the company’s container plant, which is a part of Packaging Division. Blending Division uses all of the container plant’s production. Each division (Blending and Packaging) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Blending Division.
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The Hershey Company (HSY) manufactures chocolate
confectionery products. The three largest raw materials are
cocoa, sugar, and dehydrated milk. These raw materials
first go into the Blending Department. The blended product
is then sent to the Molding Department, where the bars of
candy are formed. The candy is then sent to the Packing
Department, where the bars are wrapped and boxed. The
boxed candy is then sent to the distribution center, where
is eventually sold to food brokers and retailers.
Show the accounts debited and credited for each of the
following business events:
a. Materials used by the Blending Department.
b. Transfer of blended product to the Molding Department.
c. Transfer of chocolate to the Packing Department.
d. Transfer of boxed chocolate to the distribution center.
e. Sale of boxed chocolate.
Chapter 17 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Should actual or budgeted service department costs...Ch. 17 - Prob. 4RQCh. 17 - Why does dual cost allocation improve the...Ch. 17 - What potential behavioral problem can result when...Ch. 17 - Should actual or budgeted service department costs...Ch. 17 - Explain the difference between two-stage...Ch. 17 - Define the following terms: joint production...Ch. 17 - Prob. 10RQ
Ch. 17 - Describe the relative-sales-value method of joint...Ch. 17 - Define the term net realizable value, and explain...Ch. 17 - Are joint cost allocations useful? If they are,...Ch. 17 - For what purpose should the managerial accountant...Ch. 17 - Prob. 15ECh. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Tuscaloosa National Bank has two service...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Breakfasttime Cereal Company manufactures two...Ch. 17 - Refer to the data given in the preceding exercise....Ch. 17 - Refer to the data given in Exercise 1720....Ch. 17 - Prob. 23ECh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Celestial Artistry Company is developing...Ch. 17 - Snake River Sawmill manufactures two lumber...Ch. 17 - Travelcraft Company manufactures a complete line...Ch. 17 - Biondi Industries is a manufacturer of chemicals...Ch. 17 - Berger Company manufactures products Delta, Kappa,...Ch. 17 - Prob. 31PCh. 17 - Lafayette Company manufactures two products out of...Ch. 17 - Refer to the data given in Problem 1726 for...Ch. 17 - Prob. 34PCh. 17 - Top Quality Fruit Company, based on Oahu, grows,...Ch. 17 - Prob. 36C
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