Illinois soy products isp buys soybeans and processes them


Illinois Soy Products (ISP) buys soybeans and processes them into other soy products. Each ton of soybeans that ISP purchases for $340 can be converted for an additional $190 into 575 pounds of soy meal and 160 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.24 and soy oil can be sold in bulk for $4.25 per gallon. ISP can process the 575 pounds of soy meal into 725 pounds of soy cookies at an additional cost of $380. Each pound of soy cookies can be sold for $2.24 per pound. the 160 gallons of soy oil can be packaged at a cost of $240 and made into 640 quarts of Soyola. Each quart of Soyola can be sold for $1.35 1. Allocate the joint cost to the cookies and Soyola using the following: A. Sales value at split off method B. NRV method 2. Should ISP have processed each of the products further? What effects does the allocation method have on this decision?

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Financial Accounting: Illinois soy products isp buys soybeans and processes them
Reference No:- TGS01057972

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