17/20-17/22 breakfasttime cereal company manufactures two breakfast

Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows:
 
Joint Cost Cereal                          Quantity at Split-Off Point            Sales Price per Kilogram
$30,000    Yummies ………………… 12,000 kilograms ………………………………. $2.00
                Crummies ……………….. 8,000 kilograms ………………………………. 2.50
 
Required: Use the physical-units method to allocate the company’s joint production cost between
Yummies and Crummies.
 
Refer to the data given in the preceding exercise.
Required: Use the relative-sales-value method to allocate Breakfasttime Cereal Company’s joint production
cost between Yummies and Crummies.
 
Refer to the data given in Exercise 17–20 . Breakfasttime 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.
 
Required:
1. Should Breakfasttime’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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