Allocating Joint Costs Using the Physical Units Method – Orchard Fresh, Inc., purchases apples… 1 answer below »

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Allocating Joint Costs Using the Physical Units Method

Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 26,000 pounds of apples is as follows:

Grades Pounds
Grade A 2,600
Grade B 6,500
Slices 10,400
Applesauce 6,500
Total 26,000

Total joint cost is $18,200.

Required:

1.Allocate the joint cost to the four grades of apples using the physical units method.

Joint Cost
Grades Allocation
Grade A $
Grade B
Slices
Applesauce
Total $

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