Pike Seafood Company purchases lobsters and processes them into tails and flakes. It sells the...
Question:
Pike Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for {eq}\$20 {/eq} per pound and the flakes for {eq}\$15 {/eq} per pound. On average, {eq}100 {/eq} pounds of lobster are processed into {eq}57 {/eq} pounds of tails and {eq}24 {/eq} pounds of flakes, with {eq}\19 {/eq} pounds of waste. Assume that the company purchased {eq}3,000 {/eq} pounds of lobster for {eq}\$6.00 {/eq} per pound and processed the lobsters with an additional labor cost of {eq}\$1,800 {/eq}. No materials or labor costs are assigned to the waste. The company sold {eq}1,510 {/eq} pounds of tails and {eq}710 {/eq} pounds of flakes.
(1) What is the allocated cost of the sold items? The company allocates joint costs on a value basis.(Round your cost per pound to 2 decimal places. Omit the {eq}"\$" {/eq} sign in your response.)
(2) What is the allocated cost of the ending inventory? The company allocates joint costs on a value basis. (Round your cost per pound to 2 decimal places. Omit the {eq}"\$" {/eq} sign in your response.)
Joint Costs:
Joint costs are those costs that a business incurs till the point when products can be separately identifiable. Joint costs are generally allocated based on the value at the split-off point.
Answer and Explanation: 1
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View this answerGiven that 100 pounds of lobster are processed into 57 pounds of tails and 24 pounds of flakes.
So, 3,000 pounds of lobster would give
{eq}3,000 *...
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Determining the costs in a business and making a decision based on the information that has been collected is how managers look after the financial well-being of their businesses. Learn about making decisions, determining the costs of product lines, special orders, and more.
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