Jim Davis Company Processes Hogs into Three Products, Chops, Bacon

question 39

Essay

Jim Davis Company processes hogs into three products, chops, bacon and sausage. Production and selling price data follow: Bacon was smoked, sliced and packaged after the split-off point. The cost incurred for these processes was $100,000. Sausage was ground and formed into patties after the split-off. This process cost $60,000.
If joint processing costs were $1,500,000, calculate the total cost of each product using the adjusted sales value method.

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Definitions:

Financial Advantage

The benefit obtained in financial terms, giving an entity a superior position relative to competitors or market average.

Intermediate Products

Goods that are produced by a business as part of the production process of another final product or service.

Sugar Cane

A tropical grass cultivated for its tall stalks, which are the primary source of sugar.

Industrial Fiber

Materials, often synthetic, used in the manufacture of products requiring strength, durability, or specific technical properties, such as textiles and composites.