Question

Florissa's Flowers jointly produces three varieties of flowers in the same garden: tulips, lilies, and daisies. The flowers are all watered via the same irrigation system and all receive the same amount of water; daisies require three times as much as lilies, and the water required for tulips is about halfway between the amounts needed for daisies and lilies. Although the lilies and tulips receive more water than they need due to the joint irrigation process, they are not hurt by the overwatering. The joint production cost of the three varieties of flowers is about $30 per harvest. Every harvest yields 10 tulips, 20 lilies, and 20 daisies.
1. Allocate the joint costs of production to each product using the physical units method.

Joint
Product Flowers
per Harvest Proportion Joint
Costs Allocation
Tulip % $ $
Lily %
Daisy %
Totals $
Which products receive the largest portion of the joint costs?

received the largest portion of the joint costs.

2. Allocate the joint costs of production to each product using the weighted average method.

Joint
Product Flowers
per Harvest Weight
Factor Weighted
Flowers
of Water Weighted
Percent
of Water Joint
Costs Allocation
Tulip % $ $
Lily %
Daisy %
Totals $
Which product receives the largest portion of the joint costs?

received the largest portion of the joint costs.

3. Why would it be important to consider the watering process as an appropriate weight factor?

a. The cost of watering the plants is a large portion of the joint costs and the company follows the same irrigation system for all three varieties of flowers.

b. It is a natural resource which is more precious.

c. Daisies have the highest market value.

d. None of the above.

Answer 1

Answer:

1.) Lilies and Daisies received the largest portion of the joint costs.

2.) Daisies received the largest portion of the joint costs.

3.) a. The cost of watering the plants is a large portion of the joint costs and the company follows the same irrigation system for all three varieties of flowers.

Explanation:

Physical unit method :

Joint product _Flo /harvest _prop__JC__Alloc

Tullip ________10 _______0.20 _ 30 __ 6

Lilly _________ 20 ______0.40 _ 30 __ 12

Daisy ________ 20 ______0.40 _ 30 __ 12

Allocation = proportion * joint cost

B.)

Weighted average method :

If daisy requires 3 tines as much as lilies and tulips requires something in between both ;

Then ;

Daisy = 3 ; lilies = 1 ;

Tullips = (daisy + lilies) / 2 = (3 +1) / 2= 4/2 = 2

Weighted average method :

JP_Flo /H_ WF__WFW_W%__pro__JC__Alloc

Tullip_10 __ 2 __ 20 _ 20% _0.20 _ 30 __ 6

Lilly_ 20 ___ 1 __ 20 _ 20% _0.20 _ 30 __ 6

Daisy_20 __ 3__ 60 _ 60% _0.60 _ 30 __ 18

Allocation = joint cost * proportion