Ray, Inc., is a large food-processing company. It processes 159,000 pounds of peanuts in the...
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Ray, Inc., is a large food-processing company. It processes 159,000 pounds of peanuts in the peanuts department at a cost of $254,500 to yield 30,000 pounds of product A, 78,000 pounds of product B, and 15,000 pounds of product C (Click the icon to view the information.) The company wants to make a gross margin of 10% of revenues on product C and needs to allow 20% of revenues for marketing costs on product C. An overview of operations follows (Click the icon to view the overview.) Read the requirements Figure hod for allocating joint costs. Deduct the NRV mounts Joint Costs $254,500 Separable Costs Salted Peanuts Salting Department Processing $24,000 30,000 pounds 30,000 pounds S6/lb Peanuts Raw Peanuts Processing of 159,000 lb 78,000 pounds S8/lb Peanut Butter 15,000 pounds Processing $14,000 15,000 pounds Splitoff Point More Info Product A is processed further in the salting department to yield 30,000 pounds of salted peanuts at a cost of $24,000 and sold for $6 per pound Product B (raw peanuts) is sold without further processing at $8 per pound Product C is considered a byproduct and is processed further in the paste department to yield 15,000 pounds of peanut butter at a cost of $14,000 and sold for $7 per pound Check
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