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Tangy Fresh Produces Orange Juice and Orange Marmalade From A

Tangy Fresh processes oranges to produce orange juice and orange marmalade through a joint process with three departments. In Department 1, 140,000 pounds of oranges were processed, with 56,000 gallons of output split between Departments 2 and 3. Department 2 produces orange juice while Department 3 produces marmalade and pulp, with pulp byproduct sold to reduce Department 3 costs. Joint costs are allocated to the main products based on their approximated net realizable values at split-off.

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Amit Pandey
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49 views1 page

Tangy Fresh Produces Orange Juice and Orange Marmalade From A

Tangy Fresh processes oranges to produce orange juice and orange marmalade through a joint process with three departments. In Department 1, 140,000 pounds of oranges were processed, with 56,000 gallons of output split between Departments 2 and 3. Department 2 produces orange juice while Department 3 produces marmalade and pulp, with pulp byproduct sold to reduce Department 3 costs. Joint costs are allocated to the main products based on their approximated net realizable values at split-off.

Uploaded by

Amit Pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Solved: Tangy Fresh produces orange juice and orange

marmalade from a
Tangy Fresh produces orange juice and orange marmalade from a

Tangy Fresh produces orange juice and orange marmalade from a joint process. Second-stage
processing of the marmalade creates an orange pulp by-product that can be sold for $0.05 per
gallon. Expenses to distribute pulp total $90.
In May 2010, 140,000 pounds of oranges costing $44,200 were processed in Department 1,
with labor and overhead costs of $33,800 incurred. Department 1 processing resulted in 56,000
gallons of output, of which 40 percent was transferred to Department 2 to become orange juice
and 60 percent was transferred to Department
3. Of the input going to Department 3, 20 percent resulted in pulp and 80 percent resulted in
marmalade. Joint cost is allocated to orange juice and marmalade on the basis of approximated
net realizable values at split-off.
The orange juice in Department 2 was processed at a total cost of $9,620; the marmalade in
Department 3 was processed at a total cost of $6,450. The net realizable value of pulp is
accounted for as a reduction in the separate processing costs in Department 3. Selling prices
per gallon are $5.25 and $3.45 for orange juice and marmalade, respectively.
a. Diagram Tangy Fresh's process in a manner similar to Exhibits 11-5 and 11-10.
b. How many gallons leaving Department 1 were sent to Department 2 for further processing?
To Department 3?
c. How many gallons left Department 3 as pulp? As marmalade?
d. What is the net realizable value of pulp?
e. What is the total approximated net realizable value of the orange juice? The marmalade?
f. What amount of joint cost is assigned to each main product?
g. If 85 percent of the final output of each main product was sold during May and Tangy Fresh
had no beginning inventory of either product, what is the value of the ending inventory of orange
juice and marmalade?

Tangy Fresh produces orange juice and orange marmalade from a

ANSWER
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