Question

CengageNOWV2 | Online teaching and learning resource from Cengage Learning Close Window Florissa's Flowers jointly produces three varieties of flowers in the same garden: tulips, lilies, and daisies. The flowers are all watered via the same irrigation system and all receive the same amount of water; daisies require three times as much as lilies, and the water required for tulips is about halfway between the amounts needed for daisies and lilies. Although the lilies and tulips receive more water than they need due to the joint irrigation process, they are not hurt by the overwatering. The joint production cost of the three varieties of flowers is about $30 per harvest. Every harvest yields 10 tulips, 20 lilies, and 20 daisies. 1. Allocate the joint costs of production to each product using the physical units method. Flowers per Harvest Joint Costs Proportion Allocation Joint Product Tulip Lily % $ % Daisy % Totals $ Which products receive the largest portion of the joint costs? received the largest portion of the joint costs. 2. Allocate the joint costs of production to each product using the weighted average method. Weighted Flowers of Water Weight Factor Weighted Percent of Water Joint Costs Allocation % $ $ Joint Flowers Product per Harvest Tulip Lily Daisy Totals % % $

Answer 1

1.

Joint Product	Flowers Per Harvest	Proportion	Joint Cost	Allocation
Tulip	10	20%	$30	$6 (30×20%)
Lily	20	40%	$30	$12 (30×40%)
Daisy	20	40%	$30	$ 12 (30×40%)
Total	50	100%		$30

Lilies and Daisies Received the Largest Portion of the Joint Cost.

2.

Joint Product	Flowers Per Harvest	Weight Factor	Weighted Flowers of Water	Weighted Pecent of Water	Joint Costs	Allocation
Tulip	10	2	20	20%	$30	$6
Liley	20	1	20	20%	$30	$6
Daisy	20	3	60	60%	$30	$18
Total	50		100			$30

If Weght of Lilies is 1 that for daisies will be 1 × 3 = 3 , and for Tulips (1 + 3 )/ 2 = 4/2 = 2