Answer:
Please see answers below
Explanation:
1a . Allocate the joint cost to the joint products
The allocation rate will be computed as follows:
Allocation cost = Total cost / Total number of pounds ( Drumstick + Breast)
= $17,500 + $3,648 / 4,400 + 6,200
= $21,148 / 10,600
= $2.0
Allocation costs of
Drumstick = Allocation rate × Drumstick
= $2.0 × 4,400
= $8,800
Chicken breast = Allocation rate × Chicken breast
= $2.0 × 6,200
= $12,400
Total cost = $8,800 + $12,400 = $21,200
2a. Market price per pound of drumstick $1.85
Market price per pound of chicken breast $2.70
The revenue for drumstick is computed as;
= 4,400 × $1.85
= $8,140
The revenue for chicken breast is computed as;
= 6,200 × $2.70
= $16,740
Compute gross margin.
Gross margin = Revenue cost - Allocation cost
Drumstick = $8,140 - $8,800 = ($660)
Chicken breast = $16,740 - $12,400 = $4,340
3a. No. This is because the drumstick can be eliminated due to the loss they are incurring, hence contribute to the total joint cost
3b. Compute reallocation rate as;
Rate = Total allocation / Total market value of drumstick + Chicken breast
= $21,200 / (4,400 × $1.85) + (6,200 × $2.7)
= $21,200 / $8,140 + $16,740
= $21,200 / $24,880
= $0.85
Compute the market cost of;
Drumstick = $0.85 × 4,400 × $1.85
= $6,919
Chicken breast = $0.85 × 6,200 × $2.70
= $14,229
3b2 Compute gross profit margin for each
Drumstick = $8,140 - $6,919
= $1,221
Chick breast = $16,740 - $14,220
= $2,520
The following information is available for Moiz Company:________.
Debit Credit
Common Stock $30,000
Retained Earnings 20,000
Dividends $30,000
Sales Revenue 510,000
Sales Returns and Allowances 20,000
Sales Discounts 7,000
Cost of Goods Sold 310,000
Freight-Out 2,000
Advertising Expense 15,000
Interest Expense 19,000
Salaries and Wages Expense 55,000
Utilities Expense 18,000
Depreciation Expense 7,000
Interest Revenue 23,000
Using the above information, prepare the closing entries for Moiz Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer and Explanation:
1. Interest Revenue $23,000
Sales Revenue $510,000
To Income Summary $533000
(Being closing of revenues accounts are closed)
2. Income Summary $453,000
To Sales returns $20,000
To Sales Discounts $7,000
To Cost Of goods sold $310,000
To Freight out $2,000
To Advertise Exp $15,000
To Interest Exp $19,000
To Salaries & Wages $55,000
To Utility $18,000
To Depreciation $7,000
(Being closing of expenses accounts are closed)
3. Income Summary $80,000
To Retained Earning $80,000
(Being profit is recorded)
4. Retained Earning $30,000
To Dividends $30,000
(Being closing of dividend is recorded)