Question

NW Flour Compary buys 1 input of standard flour and refines it using a special sitting process to 3 cups of baking tlour and 9 cups of bread flour. In May. NW bought 11,200 inputs of floar for $90,500. NW spert another $47,700 on the special sifting process. The baking flour can be sold for $3.80 per cup and the bread flour for $4.75 per cup NW puts the baking flour through a second process so li in super fine. This costs an additional $1 per cup of baking flour and the procoss ylelds 1/2 cup of super-fine baking flour for every one cup of baking flour used. The super-fine baking flour sells for 59.60 per cup. Requirement 1a. Alocate the \$139.200 joint cost to the super-fine baking flour and the bread llour using the pliysical-measure method (using cups) of joint-cost allocation (Round We welihts to fout decinal places. Round the point cents allocated to the nearest whole dolar)

Answer 1

The physical-measure method is used to allocate joint costs between super-fine baking flour and bread flour based on cups. The allocation per cup of super-fine baking flour is $8.29 and the allocation per cup of bread flour is $1.38.

Step-by-step explanation:

The physical-measure method of joint-cost allocation is used to allocate joint costs to different products based on their physical measures. In this case, the joint costs of $139,200 need to be allocated between the super-fine baking flour and the bread flour using cups as the physical measure. The total cups of super-fine baking flour can be obtained by multiplying the cups of baking flour by 1/2, while the total cups of bread flour can be obtained directly. Let's calculate the allocation for each product:

Total cups of super-fine baking flour = (3 cups of baking flour) x (1/2) x (11,200 inputs of flour) = 16,800 cups

Total cups of bread flour = (9 cups of bread flour) x (11,200 inputs of flour) = 100,800 cups

Allocation per cup of super-fine baking flour = $139,200 / 16,800 cups = $8.29 per cup

Allocation per cup of bread flour = $139,200 / 100,800 cups = $1.38 per cup