Question

Exercise 22-22C Assigning joint product costs LO C3 Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $19.10 per pound and the flakes for $15.30 per pound. On average, 100 pounds of lobster are processed into 53 pounds of teails and 26 pounds of flakes, with 21 pounds of waste. Assume that the company purchased 3,700 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $5,600. No materials or labor costs are assigned to the waste. If 1,822 pounds of tails and 877 pounds of flakes are sold, calculate the allocated cost of the sold items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. (Round your answers to nearest whole number. Round cost per pound answers to 2 decimal places.) Allocated cost 3,700 pound purchase Yield per 3,700 tb. purchase Market Value per 3,700 lb. purchase Cost per pound Cost to be allocated Percent of Market Value Denominator % of Mkt Value Numerator 0 Lobster Tails 0 Lobster Flakes 0 ces Totals 1) What is the allocated cost of the sold items? Cost of Goods Sold Cost per pound Pounds sold 0.00 Lobster Tails 0.00 Lobster Flakes $ 0 Totals 2) What is the allocated cost of the ending inventory? Cost of Ending Inventory Pounds in ending inventory Cost per pound 0.00 S Lobster Tails 0.00 Lobster Flakes Totals

Answer 1

Calculation of total joint cost-

Purchase cost = 3700*4 = $14800

Labour Cost = $5600

Total Cost = 14800+5600 = $20400

Input - output % ratio-

tails 53%, flakes 26%, waste 21%

Total Sales value to be obtain from 3700 pounds of input

Tails- 3700*53% = 1961*19.10 = 37455.10

Flakes- 3700*26% = 962*15.10 = 14526.20

Waste- 3700*21% = 777*0= 0

Total Joint cost to be allocated in the ratio 37455.10 : 14526.20

	Allocated Joint Cost(20400)	Sold Units	Sold units ($)	Ending units	Ending units ($)
Tails	14699.21	1822	13657.30	139	1041.91
Flakes	5700.79	877	5197.08	85	503.71