50.1K

Verified Solution

Link Copied!

Sunland \& Sons produces tomato juice and tomato puree from fresh tomatoes grown by local farmers. The company purchases large crates of tomatoes and then washes, sorts, scalds, peels, and crushes them, at which point the juice and the pulp are separately identifiable. Sunland currently processes the pulp further to transform it into his great-great-grandmother's secret-recipe spaghetti sauce. The specifics on each of these products for one month are as follows. Your answer is incorrect. Using the NRV method for allocating joint costs, specify how much joint cost will be allocated to the juice and to the puree/spaghetti sauce. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.) Sunland recently became aware of consumer preferences for flavored tomato juice. With some slight modifications to his facility, he could process the tomato juice further and turn it into clam-flavored tomato juice for an additional processing cost of $1,600. With no change in total volume, this flavored juice could sell for $60,000. Given this new information, recalculate the joint cost allocations for both joint products under the NRV method. (Round proportion to 4 decimal places, e.g. 0.2516 and final answers to 2 decimal places, e.g. 15.25.) Assuming that Sunland could otherwise sell the tomato puree as-is for $151,000 (instead of turning it into spaghetti sauce), would you recommend that he process both of these products past the split-off point? Show how much better or worse off Sunland would be if the puree and the juice are both processed further. Sunland \& Sons is therefor off point. by a total $ by processing both products beyond the split- eTextbook and Media

Answer & Explanation Solved by verified expert

See Answer