Wisconsin Milk and Ice Cream Manufacturing operates a single plant in Sun Prairi
ID: 2342252 • Letter: W
Question
Wisconsin Milk and Ice Cream Manufacturing operates a single plant in Sun Prairie, Wisconsin. It manufactures milk and ice cream for retail and private label marketers in the Midwest.
Requirements:
Compute the Net Realizable Value (NRV) method.
Complete the Product Line Income statement for month ended June using the NRV Method
Follow the instructions on the Data tab of the worksheet. Show all calculations within the cells of the Excel spreadsheet. This means that you must use formulas and links so that your thought process can be examined. You must also include a detailed explanation of each journal entry that you make or do not make on each date to convey your thought process. There should be no hard coding of solutions.
Joint costs Joint costs of processing raw milk Cream Liquid Skim Joint costs $ 1,000,000 [from 300,000 gallons of milk] Separable costs buttercream $ 600,000 Separable costs milk $ 500,000 Raw Milk is processed further to make Cream and Liquid Skim Cream is processed further to make Buttercream Liquid Skim is processed further to make Milk Cream Liquid Skim Buttercream Milk Beg Inventory (Gallons) 0 0 0 0 Production 100,000 150,000 90,000 125,000 Transfer 100,000 150,000 Sales in June 80,000 115,000 End inventory (Gallons) 10,000 10,000 Selling price per gallon 25 18 40 50 Required: 1). Compute the Net Realizable Value (NRV) Method 2). Compute the Product Line Income statement for month ended June using the NRV MethodExplanation / Answer
Allocation of joint costs using net realizable value method
Buttercream
Milk
Total
Final sales value
3600000
6250000
9850000
Deduct separable costs
600000
500000
1100000
Net realizable Value at split off point
3000000
5750000
8750000
Weighting (Net realizable Value at split off point of product / total Net realizable Value at split off point)
34.2857%
65.7143%
100.0000%
Joint costs Allocation (based on above weighted)
342857
657143
1000000
Separate cost
600000
500000
Allocated joint costs
342857
657143
Product cost
942857
1157143
Number Produced (in gallons)
90000
125000
Production Costs per Gallon
10.47619
9.257143
Production Costs per Gallon
10.47619
9.257143
Inventory in gallons
10000
10000
Ending inventory in value (Production Costs per Gallon / inventory in gallons)
104762
92571
Product line income statement using net realizable method
Buttercream
Milk
Total
Revenues
3600000
6250000
9850000
Costs of goods sold
Joint costs
342857
657143
1000000
Separable costs
600000
500000
1100000
Production costs
942857
1157143
2100000
Ending inventory
-104762
-92571
-197333
Costs of goods sold
1780952
2221714
4002667
Gross margin
1819048
4028286
5847333
Gross margin in % (Gross margin / Revenues)
50.5291%
64.4526%
59.3638%
Allocation of joint costs using net realizable value method
Buttercream
Milk
Total
Final sales value
3600000
6250000
9850000
Deduct separable costs
600000
500000
1100000
Net realizable Value at split off point
3000000
5750000
8750000
Weighting (Net realizable Value at split off point of product / total Net realizable Value at split off point)
34.2857%
65.7143%
100.0000%
Joint costs Allocation (based on above weighted)
342857
657143
1000000
Separate cost
600000
500000
Allocated joint costs
342857
657143
Product cost
942857
1157143
Number Produced (in gallons)
90000
125000
Production Costs per Gallon
10.47619
9.257143
Production Costs per Gallon
10.47619
9.257143
Inventory in gallons
10000
10000
Ending inventory in value (Production Costs per Gallon / inventory in gallons)
104762
92571
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.