New York University ACCT-UB ACCT-UB 2137 Dole Company jointly processed three pineapple products: Premium,…
Dole Company jointly processed three pineapple products: Premium, Good and Fair, in the Cleaning and Sorting Department. Premium and Good are joint products, while Fair is considered as a by-product. Premium and Fair pineapples can be sold a s they are to customers at the end of the Cleaning and Sorting process, whereas Good pineapples are processed further in the Cutting Department before they are sold to customers.
During the month, the company paid P 45,000 for one truckload of pineapples and P 2100 for labor to sort the pineapples into categories. Dole uses a predetermined overhead rate of 40% of direct labor cost. The following yield, costs, and final sales value resulted from the month’s truckload of pineapples.
Premium Good Fair
Yield in packs 1,500 2,000 500
Cutting and canning costs – 6,567 –
Total packaging and delivery costs 3,933 6,600 1,500
Total final sales value 90,000 45,000 11,500
A. Refer to Dole Company, allocate the joint cost to Premium using the approximated net realizable value after split-off method, assuming that the by-product is recorded when realized and us shown as Other Income on the income statement (round off answer to the nearest whole number)
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