Brevall Industries makes corn oil and corn meal from harvested corn in a joint process. Corn oil can be further processed into margarine, and the corn meal can be further processed into corn muffin mix. The joint cost incurred to process the corn to the split-off point is $140,000. Information on the quantities, value, and further processing costs for the joint product appears below: Sales Value Estimated Further Sales Value Quantity At Split-off Processing Cost After Processing Corn Oil 800,000 lbs. $0.30/lb. $0.35/lb. $0.60/lb. Corn Meal 1,600,000 lbs. 0.10/lb. 0.40/lb. 0.55/lb. Brevall allocates the joint cost to the products based on physical units. Corn oil is assigned $46,667 of joint cost and corn meal is assigned $93,333 of joint cost. Which products should be processed further? Corn oil Corn meal Both corn oil and corn meal Neither corn oil nor corn meal Additional Information is needed to answer the question

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 4CMA: Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in...

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Brevall Industries makes corn oil and corn meal from harvested corn in a joint process. Corn oil can be further processed into margarine, and the corn meal can be further processed into corn muffin mix. The joint cost incurred to process the corn to the split-off point is $140,000. Information on the quantities, value, and further processing costs for the joint product appears below:

Sales Value Estimated Further Sales Value

Quantity At Split-off Processing Cost After Processing

Corn Oil 800,000 lbs. $0.30/lb. $0.35/lb. $0.60/lb.

Corn Meal 1,600,000 lbs. 0.10/lb. 0.40/lb. 0.55/lb.

Brevall allocates the joint cost to the products based on physical units. Corn oil is assigned $46,667 of joint cost and corn meal is assigned $93,333 of joint cost. Which products should be processed further?

		Corn oil
		Corn meal
		Both corn oil and corn meal
		Neither corn oil nor corn meal
		Additional Information is needed to answer the question

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