A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $310,000, and the following quantities of product and sales revenues were produced. Product Sales ValueFeed $ 210,000Flour 148,500Starch 150,000Total $ 508,500 How much of the $310,000 cost should be allocated to feed if the value basis is used? (Round your intermediate percentage to the nearest whole percent.)
Question
A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for 210,000Flour 148,500Starch 150,000Total 310,000 cost should be allocated to feed if the value basis is used? (Round your intermediate percentage to the nearest whole percent.)
Solution
To allocate the cost of unprocessed wheat to the production of feed, flour, and starch based on the value basis, we first need to calculate the percentage of total sales that each product represents.
Step 1: Calculate the total sales value. Feed: 148,500 Starch: 210,000 + 150,000 = $508,500
Step 2: Calculate the percentage of total sales for each product. For feed, the percentage is calculated as (sales value of feed / total sales value) * 100. So, the percentage for feed = (508,500) * 100 = 41.27%. We round this to 41% as per the question's instructions.
Step 3: Allocate the cost of unprocessed wheat to each product based on their percentage of total sales. For feed, the cost allocation is calculated as (percentage of total sales for feed / 100) * total cost of unprocessed wheat. So, the cost allocation for feed = (41 / 100) * 127,100.
Therefore, 310,000 cost should be allocated to feed if the value basis is used.
Similar Questions
Whole Grain Bakery purchases an industrial bread machine for $24,000. In addition to the purchase price, the company makes the following expenditures: freight, $1,400; installation, $2,800; testing, $900; and property tax on the machine for the first year, $480.What is the initial cost of the bread machine?
Assume John agrees to sell 800 pounds of wheat to a flour mill on May 15 for $3 per pound. However, John refuses to deliver the contracted wheat because the market price then was $5 per pound. If true, the flour mill can recover _______ in damages from John.Multiple choice question.$1600$400$4000$800
Matthew grows wheat on his farm. One of his fields produced 66.8 bushels of wheat this year. If wheat is currently selling for $5.40 per bushel, how much will Matthew earn from this field?
A dishonest wheat vendor uses a weight of 1350 grams instead of 1 kg while buying his provisions, and uses a weight of 900 grams instead of 1 kg weight while selling them. He then professes to sell the provisions at their cost price to his customers. What is his profit percentage?
Suppose you are the owner of a dairy company that produces milk powder. There is a fixed cost 6.4 thousand dollars every month and variable cost 9.41 thousand dollars per ton of milk powder. The total cost in June 2018 was 16.9392 thousand dollars. What was quantity of production in tons, rounded to 2 decimal places? Question 3 Answer a. 1.12 b. 0.68 c. 8.10 d. none of the others e. 165.80
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.