Cape Cod Seafood Company purchases lobsters and? processes them into tails and f

Question

Cape Cod Seafood Company purchases lobsters and? processes them into tails and flakes. It sells the lobster tails for $21 per pound and the flakes for $14 per pound.On average, 100 pounds of lobster are processed into 52 pounds of tails and 22 pounds of flakes,with 26 pounds of waste. Assume that the company purchased 2,400 pounds of lobster for $4.50 per pound and processed the lobsters with an additional labor cost of $1,800. No materials or labor costs are assigned to the waste. If 1,096 pounds of tails and 324 pounds of flakes are sold, what is (1) the allocated cost of the sold items and (2) the allocated cost of the ending inventory? The company allocates joint costs on a market value basis. (Round the dollar cost per pound to the nearest thousandth; i.e., nearest half penny.) Show your work.

Explanation / Answer

Cape Cod-Joint cost allocation Tails Flakes Total Joint Costs $ 12,600 Unit selling price $      21.00 $   14.00 Total Sales - in units           1,096           324 Total Revenue $    23,016 $   4,536 Joint cost allocation - Units Sold $     8,631 $ 1,701 Req (1) Joint cost allocation - Ending Inventory $     1,197 $ 1,071 Req (2) Total Units           1,248           528 Unit selling price $     21.00 $ 14.00 Total Market Value $ 26,208 $ 7,392 Ratios 78% 22% Total Joint Costs $     9,828 $ 2,772 Lobster Costs     10,800 Labor Costs        1,800 Total Costs    12,600 Lobster Tails Flakes Waste Total Production Equation 100 52 22 26 100 Lobsters processed 2,400 1,248 528 624 2,400 Less: Sold 1,096 324 Inventory 152 204

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