summer is as follows:
(Click the icon to view the production and sales information.)
(Click the icon to view amounts calculated under the estimated net realizable value method.)
Data table
Calculate the amount of joint cost allocated to each product if Blue Dot uses the constant gross-margin percentage NRV method.
Begin by determining the overall gross margin.
Reference
Blue Dot Company processes tomatoes into ketchup, tomato juice, and canned tomatoes. During the summer of 2020, the joint costs of processing the tomatoes were $3,108,670. The company maintains no inventories. Production and sales information for the summer is as follows: (Click the icon to view the production and sales information.) X Data table (Click the icon to view amounts calculated under the estimated net realizable value method.)
Calculate the amount of joint cost allocated to each product if Blue Dot uses the constant gross-margin percentage NRV method.
Sales Value at Product Cases Splitoff Point Separable Costs Selling Price Ketchup 107,000 $9 per case $8 per case $31 per case Juice 177,000 $3 per case $2 per case $29 per case Canned 207,000 $11 per case $4 per case $17 per case
Begin by determining the overall gross margin. Total estimated NRV Joint costs S 9,931,000 3,108,670
Print
Done
Overall gross margin =s 6,822,330
Now, determine the gross margin allocated to each product using the table below, and then calculate the joint costs allocated to each product if Blue Dot uses the constant gross-margin percentage NRV method.
Final Sales Value
Gross Margin Percentage % % %
Gross Margin Allocated
Reference
X
Product Ketchup Juice Canned
Total Net Total Final Sales Separable Realizable Separable Total Product Product Value Costs Value Percentage Joint Costs Costs Allocated Costs Costs Ketchup S 3,317,000$ 856,000$ 2,461,000 25%$ 3,108,670$ 777,168$ 856,000|$ 1,633,168 [Juice 5,133,000 354,000 4,779,000 48% 3,108,670 1,492,162 354,000 1,846,162 Canned 3,519,000 828,000 2,691,000 27% 3,108,670| 839,341| 828,000 1,667,341
Totals
