Creekside Winery produces three types of wine, Dry, Sweet, and Fruity, using a joint process costing $150,000. The company uses the NRV method to allocate joint costs. Each type of wine can be sold as is or processed further. The information on the products is as follows: Instructions:
a.If Creekside does not process any of the products further, what will the company report for a total gross margin?
b.If Creekside processes all the wines further, what will the company report for a total gross margin?
c. Which wine or wines should the company process further? Support your conclusion with calculations.
d.If the company proceeds with your recommendation in part c, what will the company report for a total gross margin?

Question

Creekside Winery produces three types of wine, Dry, Sweet, and Fruity, using a joint process costing $150,000. The company uses the NRV method to allocate joint costs. Each type of wine can be sold as is or processed further. The information on the products is as follows:  Instructions: 
a.If Creekside does not process any of the products further, what will the company report for a total gross margin?
b.If Creekside processes all the wines further, what will the company report for a total gross margin?
c. Which wine or wines should the company process further? Support your conclusion with calculations.
d.If the company proceeds with your recommendation in part c, what will the company report for a total gross margin?

Quizplus · Accepted Answer

The Answer of Creekside Winery produces three types of wine, Dry, Sweet, and Fruity, using a joint process costing $150,000. The company uses the NRV method to allocate joint costs. Each type of wine can be sold as is or processed further. The information on the products is as follows:  Instructions: 
a.If Creekside does not process any of the products further, what will the company report for a total gross margin?
b.If Creekside processes all the wines further, what will the company report for a total gross margin?
c. Which wine or wines should the company process further? Support your conclusion with calculations.
d.If the company proceeds with your recommendation in part c, what will the company report for a total gross margin?

Creekside Winery Produces Three Types of Wine, Dry, Sweet, and Fruity