Linda works at the cranberry plant in town, which uses a common process of cleaning, sorting, flash freezing, and…

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Linda works at the cranberry plant in town, which uses a common process of cleaning, sorting, flash freezing, and crushing the berries.

At the end of this process, which costs $36,000, cranberry juice and cranberry puree are available. The cranberry puree is then made

into sauce, at an additional cost of $1.50 per pound, while the cranberry juice is further processed into syrup, at an additional cost of

$2.00 per gallon. There is no change in volume during the additional processing. Additional information is as follows.

Yield from joint process

Sales prices at split-off point

Sales prices after further processing

(a)

Using the NRV method, allocate the joint costs to each product, and determine gross margin amounts and percentages for each if

80% of each final product is sold. (Round proportion to 4 decimal places, e.g. 0.2512. Round allocated joint costs to 0

decimal places, e.g. 125, gross margin to 2 decimal places, e.g. 15.25 and gross margin percentage to 1 decimal place,

e.g. 15.2%.)

Allocated joint costs

Gross margin

15,000 pounds of puree

7.500 gallons of juice

$2.00 per pound of puree

$4.00 per gallon of juice

$4.00 per pound of sauce

$7.50 per gallon of syrup

Gross margin percentages

Puree/Sauce

Juice/Syrup

Expert Answer:

Answer rating: 100% (QA)

To allocate the joint costs using the NRV Net Realizable Value method we need to determine the sales

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