ACCTG424 Lecture Notes - Income Statement, Chocolate Liquor, Apple Juice
8 Apr 2014
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In class #15. 1 usefulness of joint cost allocation. Estimated net realizable value production, 2,000 . 80; 3,400 . 00 of further processing at splitoff point. * given: constant gross-margin percentage nrv method: Total final sales value of production, (2,000 . 80) + (3,400 . 00) Deduct joint and separable costs, (,000 + ,100 + ,500) Liquor base production (2,000 . 80); (3,400 . 00) Deduct gross margin, using overall gross-margin percentage of sales (8%) What are the gross margin percentage of chocolate powder and milk chocolate under each methods (a), (b), (c), and (d) in requirement 1: sales, sales, sales, sales. Further processing of chocolate-powder liquor base into chocolate powder: Further processing of milk-chocolate liquor base into milk chocolate: Roundtree chocolates could increase operating income by (to ,940) if chocolate- powder liquor base is sold at the splitoff point and if milk-chocolate liquor base is further processed into milk chocolate. 1 sales value at splitoff = ,040 (chocolate-powder liquor)
