buys soybeans and processes them into other soy products. Each ton of soybeans that Upper...
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buys soybeans and processes them into other soy products. Each ton of soybeans that Upper NNSP purchases for $ 320 can be converted for an additional $ 220 into 600 lbs of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at splitoff for $ 1.04 and soy oil can be sold in bulk for $ 4.75 per gallon. Upper NNSP can process the 600 pounds of soy meal into 650 pounds of soy cookies at an additional cost of $ 320 Each pound of soy cookies can be sold for $ 2.04 per pound. The 100 gallons of soy oil can be packaged at a cost of $ 260 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for $ 1.45 Requirements 1. Allocate the joint cost to the cookies and the Soyola using the following: a. Sales value at splitoff method b. NRV method 2. Should Upper NNSP have processed each of the products further? What effect does the allocation method have on this decision?
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