Question

Almond Delightsis an almond grower. They have two primary products Premium Almonds and Choice Almonds Oneacreofalmond trees yields about 600 pounds of Premium and 1,400 pounds of Choice almonds at a cost of $6,000. A pound of Premium Almonds can besold for $6.68. A pound of Choicecan besolcd for $4.28. Almond Delights further processes the 1,400 pounds of Choice almonds into 175 gallons of AIl Natural Almond Butter at an additional cost of $2,500. All Natural Almond Butter is sold for S40 per gallon. The 400 pounds of Premium Almonds is further processed into 450 pounds of Chocolate Almond Delights at an additional cost of $900. Each pound of Chocolate Almond Delights is sold for$12. 1. How much ofthejoint costs should be allocated to All Natural Almond Butter under the physical unit method? 2. How much ofthejoint costs should be allocated to All Natural Almond Butter under the sales value at split-off method? 3. How much ofthejoint costs should be allocated to Chocolate Almond Delights under the NRV method? Assuming every gallon of All Natural Almond Butter and every pound of Chocolate Almonds Delights were sold: What would gross profit be for All Natural Almond Butter under thephysical unit method? 5. What would gross profit befor Chocolate Almond Delights under the sales value at split-off method?

Answer 1

Solution 1:

Allocation of Joint Cost & Computation of Gross Margin - Physical measure method
Particulars	Premium Almond	Choice Almond	Total
Output at split off point	600	1400	2000
Allocation of Joint Cost (6:14)	$1,800.00	$4,200.00	$6,000.00

Solution 2:

Allocation of Joint Cost - Sale Value at Split off Point
Particulars	Premium Almond	Choice Almond	Total
Sale Value at Split off point	$4,008	$5,992	$10,000
Allocation of Joint Cost Premium Almond - $6000*4008/10000 Choice Almond - $6000*5992/10000	$2,404.80	$3,595.20	$6,000

solution 3:

Allocation of Joint Cost - NRV Method
Particulars	Premium Almond	Choice Almond	Total
Sale Value after further processing	$5,400.00	$7,000.00	$12,400
Further Processing Cost	$900.00	$2,500.00	$3,400
Net Realisable Value	$4,500.00	$4,500.00	$9,000.00
Allocation of Joint Cost Premium Almond - $6000*4500/9000 Choice Almond - $6000*4500/9000	$3,000	$3,000	$6,000

Solution 4:

Computation of Gross Margin - Physical measure method
Particulars	Premium Almond	Choice Almond	Total
Sales (A)	$5,400.00	$7,000.00	$12,400.00
Joint Cost (B)	$1,800.00	$4,200.00	$6,000.00
Further Processing Cost ( C )	$900.00	$2,500.00	$3,400.00
Gross Margin (D) (A-B-C)	$2,700.00	$300.00	$3,000.00

Note: I have answered first 4 parts as per HomeworkLib policy. Kindly post separate question for answer of remaining parts.