Answer:
a1)
drumstink  3,780
breast        5,670
a2)
drumstink  (280)
breast       3,570
a3) it cannot be eliminated as it is a subproduct of the breast we cannot produce breast without also, produing the drumstink
b) joint-cost and gross margin considering market value as wat to allocate joint-cost
drumstink  2.596,15
breast  .853,85
gross margin 
drumstink 903.85
breast    2,386.15
<em>Questions:</em>
a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base.
a-2. Calculate the gross margin for each product.
a-3. If the drumsticks are producing a loss, should that product line be eliminated?
b-1. Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base.
b-2. Calculate the gross profit for each product.
Explanation:
cost for the joint process:
7,000 raw materials + 2,450 conversion cost = 9,450
weights: 2,800 drumstiks   
            <u>   4,200 breast         </u>
total       7,000
drumstink 9,450 x 2,800/7,000  = 3780
breast  9,450 x 4,200/7,000  = 5670
gross margin 
drumstink 2,800 * 1.25  - 3,780=  (280)
breast 4,200 * 2.20  - 5,670 =     3,570
<em>using market value as weight:</em>
drumstink 2,800 * 1.25  =  3,500
breast 4,200 * 2.20       = <u> 9,240 </u>
total sales value                12,740
drumstink 9,450 x 3,500/12,740  = 2.596,15
breast  9,450 x 9,240/12,740  = 6.853,85
gross margin 
drumstink 3,500  - 2,596.15 = 903.85
breast 9,240  - 6,853.85 =   2,386.15