Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each...
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Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each tonne of soy beans that SSP purchases for $380 can be converted for an additional $190 into 700 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.12, and soy oil can be sold in bulk for $4 per gallon. SSP can process the 700 lbs of soy meal into 750 lbs of soy cookies at an additional cost of $330. Each pound of soy cookies can be sold for $2.12 per pound. The 80 gallons of soy oil can be packaged at a cost of $220 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.35. Required 1. Allocate the joint cost to the cookies and the Soyola using: a. Sales value at splitoff method b. NRV method 2. Should the company have processed each of the products further? What effect does the allocation method have on this decision? Requirement 1a. Allocate the joint cost to the cookies and the Soyola using the sales value at splitoff method. (Round the weightings to three decimal places and joint costs to the nearest dollar.) Cookies/ Soy Meal Soyolal Soy Oil Total Sales value of total production at splitoff Weighting Joint costs allocated
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