Old Virginia Meat Processing Plant processes hogs to produce three joint products: bacon, sausage, and pork chops. The company incurs common processing costs of $100,000 per batch. Each batch yields 15,000 pounds of bacon, 18,000 pounds of sausage, and 7,000 pounds of pork chops. Pork chops can be sold for $3.00 per pound. The bacon and sausage products are sold at the split-off point for $3.25 per pound and $3.50 per pound, respectively.
Required:
1) Allocate Old Virginia's joint costs using pounds produced as the allocation base.
2) Allocate Old Virginia's joint costs using the relative sales value at split-off method.
3) Assume that the pork chops are processed further after the split-off point at an additional cost of $4,000 and that joint costs are allocated based on pounds produced. What would be the total cost assigned to pork chops?

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The Answer of Old Virginia Meat Processing Plant processes hogs to produce three joint products: bacon, sausage, and pork chops. The company incurs common processing costs of $100,000 per batch. Each batch yields 15,000 pounds of bacon, 18,000 pounds of sausage, and 7,000 pounds of pork chops. Pork chops can be sold for $3.00 per pound. The bacon and sausage products are sold at the split-off point for $3.25 per pound and $3.50 per pound, respectively.
Required:
1) Allocate Old Virginia's joint costs using pounds produced as the allocation base.
2) Allocate Old Virginia's joint costs using the relative sales value at split-off method.
3) Assume that the pork chops are processed further after the split-off point at an additional cost of $4,000 and that joint costs are allocated based on pounds produced. What would be the total cost assigned to pork chops?

Old Virginia Meat Processing Plant Processes Hogs to Produce Three