Acct434 Advanced Cost Management: Week 4 Problem 1 - Red Sauce Canning Company

Acct434 Advanced Cost Management
Week 4

Problem 1
Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:

Product Cases Sales Value at Splitoff Point Separable Costs Selling Price

Catsup 100,000 6 per case $3.00 per case 28 per case

Juice 150,000 8 per case 5.00 per case 25 per case

Canned 200,000 5 per case 2.50 per case 10 per case

Question: Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product
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