Penny's Pineapples Is a Pineapple Grower

Essay

Penny's Pineapples is a pineapple grower.After cultivating,fertilizing,growing,and picking pineapples,the company sells whole pineapples to food processors.The company is considering adding a processing line where sliced pineapples and pineapple juice,along with a "mash" used for animal feed will be the final products.Projected information about the costs follows:
Joint product costs of cultivating,fertilizing and picking pineapples total $1,000,000.Required:
(a)Determine the amount of separable costs allocated to each product using the net realizable value method.(b)Determine the final cost per unit for each product.(c)Determine the gross margin for each product.(d)A fertilizer manufacturer approaches Penny Martin,the President of the company,and asks to buy the rinds and other excess materials currently used to produce Mash.He would be willing to pay $0.30 per pound for these materials.What advice would you give Penny?