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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 38
Allocating Joint Costs Using the Weighted Average Method
Refer to Cornerstone Exercise 7.7. Assume that Orchard Fresh, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades of apples:
Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of apples using the weighted average method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollar.)
2. What if the factory found that Grade A apples were being valued less by customers and decided to decrease the weight factor for Grade A apples to 3.0? How would that affect the allocation of cost to Grade A apples? How would it affect the allocation of cost to the remaining grades?
Refer to Cornerstone Exercise 7.7. Assume that Orchard Fresh, Inc., uses the weighted average method of joint cost allocation and has assigned the following weights to the four grades of apples:
Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of apples using the weighted average method. (Carry out the percent calculations to four significant digits. Round all cost allocations to the nearest dollar.)
2. What if the factory found that Grade A apples were being valued less by customers and decided to decrease the weight factor for Grade A apples to 3.0? How would that affect the allocation of cost to Grade A apples? How would it affect the allocation of cost to the remaining grades?
Explanation
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Orchard fresh, Inc. purchases apples fro...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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