The following question was answered for me, however, I need help on how to expla

ID: 2459041 • Letter: T

Question

The following question was answered for me, however, I need help on how to explain the calculations at the bottom. Thank you

Pyramid Printing Company is a printer of magazines and retail inserts. In addition, there are two joint products (food wrapping and book covers) and one byproduct (shipping-box inserts) that originate from the trimmings of Pyramid’s paper rolls in production. The food wrapping and book covers are the same size. The shipping-box inserts are sold to online retailers for shipping books. All joint products and byproducts are sold as sustainable alternatives to other recycling opportunities.

Pyramid’s cost information by process follows:

Pyramid Printing Company Products

Pounds of production

Cost

Magazines

400,000

$1,400,000

Retail inserts

360,000

1,000,000

Food wrapping

100,000

1,200,000

Book covers

240,000

1,600,000

Shipping-box inserts (byproduct)

20,000

40,000

The shipping-box inserts are able to be sold for $800,000 to online retailers.

Requirements:

Determine the cost of food wrapping and book covers if the sales method is used for shipping-box inserts.

Determine the cost of food wrapping and book covers if the production method is used for shipping box inserts.

Which method would you suggest is the best for Pyramid?

Comment Expert Answer asdfghj asdfghj answered this 1 hour later

Cost of food wrapping and book covers if the sales method is used for shipping-box inserts Cost of food wrapping = 1,200,000 + 17143 = 1217143

Cost of book covers =1,600,000 + 22857 = 1622857

Cost of food wrapping and book covers if the production method is used for shipping-box inserts

Cost of food wrapping = 1,200,000 + 11765 = 1211765

Cost of book covers =1,600,000 + 28235 = 1628235 sales method is best for Pyramid