Tim Richardson.
If you are interested, this is my solution to Horngren15-30
1a.
Output
Item |
Output (lbs) |
|---|---|
apple slices |
89100 |
applesauce |
81000 |
apple juice |
67500 |
animal feed |
27000 |
sales value |
separable cost |
NRV at splitoff |
weighting |
|
|---|---|---|---|---|
apple slices |
$71280 |
11280 |
60000 |
50% |
applesauce |
44550 |
8550 |
36000 |
30% |
applejuice |
27000 |
3000 |
24000 |
20% |
animal feed |
2700 |
700 |
2000 |
cost of cutting dept 60000
less animal feed NRV 2000
58000
cost allocation |
||
|---|---|---|
apple slices |
50% |
29000 |
apple sauce |
30 |
17400 |
apple juice |
20 |
11600 |
animal feed |
2000 |
|
TOTAL |
60000 |
d) gross margin in dollars
| apple slices | apple sauce | apple juice | |
| gross margin | 31000 |
18600 |
12400 |
2.
The gross margin includes a sunk and relevant cost component, so it is not useful for
management decision making. Only relevant costs are useful.
This is similar to the difference in management use between gross margin reporting and
contribution margin reporting.
--
Tim Richardson
For contact details and news: http://www.tim-richardson.net