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Module 9 Problems - Mrnak
Module 9 Problems - Mrnak
Given:
Quality Chicken grows and processes chickens. Each chicken is disassembled
into five main parts. Information pertaining to production in July 2009 is:
Given:
Quality Chicken grows and processes chickens. Each chicken is disassembled
into five main parts. Information pertaining to production in July 2009 is:
Quality Chicken is computing thhe EI values for its July 31, 2009, balance sheet. EI amounts on July 31
are:
Parts Pounds of Product
Breasts 15
Wings 4
Thighs 6
Bones 5
Feathers 2
1. Compute the cost of the ending inventory if all products are accounted for as joint products.
The sales values at the split-off point is used to assign joint manufacturing costs.
2. Assume Quality Chicken uses the production method of accounting for byproducts. What are the
EI values for each joint product on July 31, 2009, assuming breasts and thighs are the joint
products and wings, bones, and feathers are byproducts?
Both methods account for all of the $50 of joint manufacturing costs as either COGS or EI.
Both methods are arbitrary and acceptable under GAAP.
Cost of EI in Total
Goods Sold Dollars Costs
$25.407609 $4.4837 $29.8913
$3.200000 $0.8000 $4.0000
$6.467391 $1.1413 $7.6087
$7.500000 $0.5000 $8.0000
$0.400000 $0.1000 $0.5000
$42.975000 $7.0250 $50.0000
Corn Syrup Corn Starch Joint Costs
Joint costs (costs of processing
corn to splitoff point) $325,000
Separable cost of processing
beyond splitoff point $375,000 $93,750
Beginning inventory (cases) 0 0
Production and Sales (cases) 12,500 6,250
Ending inventory (cases) 0 0
Selling price per case $50 $25