Fruit Products Company Purchased 60,000 Pounds of Fresh Apples from a Local

Essay

Fruit Products Company purchased 60,000 pounds of fresh apples from a local grower for $24,000.The apples were separated into high quality grade A apples (18,000 pounds),and lower quality grade B apples (42,000 pounds).Fruit Products sells Grade A apples for $2.40 per pound,and grade B apples for $1.50 per pound.
(1)Allocate joint costs to each product using the physical quantities method (pounds),and calculate the profit or loss for each product and in total.
(2)Allocate joint costs to each product using the sales value method,and calculate the profit or loss for each product and in total.
(3)Assume grade B apples can be processed further into dried apples for an additional $0.40 per pound.Customers are willing to pay $1.80 per pound for the dried apples.Should Fruit Products process the grade B apples further? Explain.