Question

Gordon’s Smoothie Stand makes three types of smoothies: blueberry lemon, orange swirl, and triple berry. Before all flavors are added, the smoothies go through a joint mixing process that costs a total of $43 per batch. One batch produces 21.75 cups of blueberry lemon smoothies, 29 cups of orange swirl smoothies, and 36.25 cups of triple berry smoothies. In addition, Gordon has studiously noted that the mixing process necessary for triple berry and blueberry lemon smoothies takes twice as long as it does for orange swirl smoothies. Allocate the joint costs of production to each product using the weighted average method

Answer 1

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Gordon’s Smoothie Stand
Allocation of joint costs
	Blueberry lemon smoothies	Orange swirl smoothies	Triple berry smoothies	Total	Note
Number of cups produced	21.75	29.00	36.25		A
Weight	2.00	1.00	2.00		B
Weighted Number of cups produced	43.50	29.00	72.50	145.00	C=A*B
Cost per batch				43.00	D
Cost per Weighted Number of cups produced				0.30	E=D/C
Cost allocated to each product	12.90	8.60	21.50	43.00	F=C*E