Question

Pirate Seafood Company purchases lobsters and processes them into talls and flakes. It sells the lobster tails for $20.40 per pound and the flakes for $15.50 per pound. On average, 100 pounds of lobster are processed into 54 pounds of tails and 28 pounds of flakes, with 18 pounds of waste. Assume that the company purchased 3,000 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $9,700. No materials or labor costs are assigned to the waste. If 1.483 pounds of tails and 757 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 Cost per Cost to be Yield per 3.000 lb. purchase Market Value per 3,000 lb. purchase Percent of Market Value allocated 3.000 pound pound purchase % of Mkt Numerator Denominator Lobster Tails Lobster Flakes Totals 1) What is the allocated cost of the sold items? Cost of Cost per Pounds sold Goods pound Sold Lobster Tails Lobster Flakes Totals 2) What is the allocated cost of the ending inventory? Pounds in Cost of Cost per ending Ending pound inventory Inventory Lobster Tails Lobster Flakes Totals

Answer 1

	Yield per 3000 lb purchased	Market value per 3000 lb purchased	Percentage of Market value			Cost to be allocated	Allocated cost 3000lb purchased	cost per pound
			Numerator	Denominator	% of market value
Lobster tails	1620	33048	33048	46068	72%		15567	9.61
Lobster flakes	840	13020	13020	46068	28%		6133	7.30
Total	2460	46068				(3000*4)+9700 = 21700	21700
1. what is the allocated cost of sold items
	cost per pound	Pounds sold	Cost of Goods sold
Lobster tails	9.61	1483	14251
Lobster flakes	7.30	757	5527
Total		2240	19778
2. what is the cost of ending inventory
	cost per pound	Pounds in ending inventory	Cost of ending inventory
Lobster tails	9.61	137	1316
Lobster flakes	7.30	83	606
Total		220	1922