Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts.
GEORGIA ORCHARDS
Income Statement
For Year Ended December 31, 2015 No. 1 No. 2 No. 3 Combined Sales (by grade) No. 1: 234,000 Ibs. @ $2.10/lb $ 491,400 No. 2: 234,000 Ibs. @ $1.90/lb $ 444,600 No. 3: 936,000 Ibs. @ $0.25/lb $ 234,000 Total sales $ 1,170,000 Costs Tree pruning and care @ $0.30/Ib 70,200 70,200 280,800 421,200 Picking, sorting, and grading @ $0.20/Ib 46,800 46,800 187,200 280,800 Delivery costs 17,000 17,000 39,500 73,500 Total costs 134,000 134,000 507,500 775,500 Net income (loss) $ 357,400 $ 310,600 $ (273,500 ) $ 394,500
In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The companyâs delivery cost records show that $34,000 of the $73,500 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,500 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery.
Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.)
Tree Pruning and Care: Grade Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 No. 2 No. 3 Totals Picking, Sorting, and Grading: Grade Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 No. 2 No. 3 Totals Delivery: Grade Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Nos. Numerator Denominator % of Total No. 1 No. 2 No. 3 Totals
Using your answers to part 1, prepare an income statement using the joint costs allocated on a sales value basis. (Do not round intermediate calculations.)
GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2015 No. 1 No. 2 No. 3 Combined Costs Total costs
| Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company believes it should have given its No. 3 peaches to charity and saved its efforts. |
| GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2015 | ||||||||||||
| No. 1 | No. 2 | No. 3 | Combined | |||||||||
| Sales (by grade) | ||||||||||||
| No. 1: 234,000 Ibs. @ $2.10/lb | $ | 491,400 | ||||||||||
| No. 2: 234,000 Ibs. @ $1.90/lb | $ | 444,600 | ||||||||||
| No. 3: 936,000 Ibs. @ $0.25/lb | $ | 234,000 | ||||||||||
| Total sales | $ | 1,170,000 | ||||||||||
| Costs | ||||||||||||
| Tree pruning and care @ $0.30/Ib | 70,200 | 70,200 | 280,800 | 421,200 | ||||||||
| Picking, sorting, and grading @ $0.20/Ib | 46,800 | 46,800 | 187,200 | 280,800 | ||||||||
| Delivery costs | 17,000 | 17,000 | 39,500 | 73,500 | ||||||||
| Total costs | 134,000 | 134,000 | 507,500 | 775,500 | ||||||||
| Net income (loss) | $ | 357,400 | $ | 310,600 | $ | (273,500 | ) | $ | 394,500 | |||
| In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The companyâs delivery cost records show that $34,000 of the $73,500 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,500 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery. |
Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.)
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Related questions
The following information applies to the questions displayed below.]
Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on its No. 3 peaches.
| GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2017 | |||||||||||||
| No. 1 | No. 2 | No. 3 | Combined | ||||||||||
| Sales (by grade) | |||||||||||||
| No. 1: 272,500 Ibs. @ $1.80/lb | $ | 490,500 | |||||||||||
| No. 2: 272,500 Ibs. @ $1.40/lb | $ | 381,500 | |||||||||||
| No. 3: 872,000 Ibs. @ $0.25/lb | $ | 218,000 | |||||||||||
| Total sales | $ | 1,090,000 | |||||||||||
| Costs | |||||||||||||
| Tree pruning and care @ $0.50/Ib | 136,250 | 136,250 | 436,000 | 708,500 | |||||||||
| Picking, sorting, and grading @ $0.10/Ib | 27,250 | 27,250 | 87,200 | 141,700 | |||||||||
| Delivery costs | 16,600 | 16,600 | 39,000 | 72,200 | |||||||||
| Total costs | 180,100 | 180,100 | 562,200 | 922,400 | |||||||||
| Net income (loss) | $ | 310,400 | $ | 201,400 | $ | (344,200 | ) | $ | 167,600 | ||||
In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The companyâs delivery cost records show that $33,200 of the $72,200 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,000 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery.
Problem 24-5AC Part 1
Required:
1. Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.)
[The following information applies to the questions displayed below.]
Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on its No. 3 peaches.
| GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2017 | |||||||||||||
| No. 1 | No. 2 | No. 3 | Combined | ||||||||||
| Sales (by grade) | |||||||||||||
| No. 1: 272,500 Ibs. @ $1.80/lb | $ | 490,500 | |||||||||||
| No. 2: 272,500 Ibs. @ $1.40/lb | $ | 381,500 | |||||||||||
| No. 3: 872,000 Ibs. @ $0.25/lb | $ | 218,000 | |||||||||||
| Total sales | $ | 1,090,000 | |||||||||||
| Costs | |||||||||||||
| Tree pruning and care @ $0.50/Ib | 136,250 | 136,250 | 436,000 | 708,500 | |||||||||
| Picking, sorting, and grading @ $0.10/Ib | 27,250 | 27,250 | 87,200 | 141,700 | |||||||||
| Delivery costs | 16,600 | 16,600 | 39,000 | 72,200 | |||||||||
| Total costs | 180,100 | 180,100 | 562,200 | 922,400 | |||||||||
| Net income (loss) | $ | 310,400 | $ | 201,400 | $ | (344,200 | ) | $ | 167,600 | ||||
In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The companyâs delivery cost records show that $33,200 of the $72,200 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $39,000 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery.
Problem 24-5AB Part 2
2. Using your answers to part 1, prepare an income statement using the joint costs allocated on a sales value basis. (Do not round intermediate calculations.)
