Formula,Inc

question 46

Essay

Formula,Inc. ,processes sugar into candy and powdered drink mix.The sugar costs $61,000 per load.The process involves mixing the sugar for 2 hours,producing 60,000 packs of candy with a market value of $25,000,and 20,000 packs of drink mix with a market value of $100,000.The joint cost of the mixing process is $28,600.
Required:
a.If the sugar and the mixing process costs are to be allocated on the basis of units of output,what cost is assigned to each product?
b.If the sugar and the mixing process costs are allocated on the basis of the net realizable value,what cost is assigned to each product?
c.How much profit or loss does the candy product provide using the data in this problem and your analysis in requirement (a)? Is it really possible to determine which product is more profitable? Explain why or why not.

Develop an understanding of the importance of proactive assignment completion.

Learn how to predict and manage distractions effectively.

Know when and how to seek academic advice for refocusing academic or career paths.

Appreciate the significance of planning assignments well before due dates.

---

Definitions:

Resale Value

The estimated amount that an asset or good will be sold for at the end of its useful life.

Replenished Material

Materials that have been restocked or resupplied to ensure adequate levels for production.

Relevant Cost

Costs that are directly influenced by a specific business decision and will change as a result of that decision.

Existing Stocks

Refers to the inventory of goods or materials that a company currently holds.