Dont Copy from Chegg Write explained answer. Breakfast time Cereal Company has an opportunity...
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Dont Copy from Chegg Write explained answer.
Breakfast time Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $.50 per kilogram and the mulch will sell for $3.50 per kilogram.
Joint Cost
Cereal
Quantity at Split-Off Point
Sales Price per Kilogram
$30,000
Yummies
12,000 kilograms
$2
Crummies
8,000 kilograms
2.50
Required:
Dont Copy from Chegg Write explained answer.
1. Should Breakfast time's management decide to process Crummies into the mulch? Why?
2. Suppose the company does process Crummies into the mulch. Use the net-realizable-value method to allocate the joint production cost between the mulch and the Yummies.
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