Business, 12.02.2020 02:20 jess7kids

Martin Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 12,000 pounds of raw chicken that costs $7,000, the company produces two parts: 2,800 pounds of drumsticks and 4,200 pounds of breast for a processing cost of $2,450. The chicken breast is further processed into 3,200 pounds of steak for a processing cost of $2,000. The market price of drumsticks per pound is $1.25 and the market price per pound of chicken steak is $4.20. If Martin decided to sell chicken breast instead of chicken steak, the price per pound would be $2.20

B-1 Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base. (Round your intermediate calculations and final answers to 2 decimal places.)

B-2 Calculate the gross margin for each product. (Round your intermediate calculations and final answers to 2 decimal places.)

C-1 Should Martin further process chicken breasts into chicken steak? (Use the assumption made in requirement b-1).

C-2 How would the profit be affected by your answer C-1

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Martin Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens...

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