Answer:
Chicken drumsticks:
pounds 6,600 - 7,230.22 = -630,22
market value: 6,600 - 5,478 = 1,122
Breast:
pounds 13,000 - 9037,88 = 3,962.12
market value: 13,000 - 10.790 = 2,210.00
Changing the allocation method detemriantes whether the drumstick are profitable or not thus, it should be considered which method is better suited.
Explanation:
Joint cost:
9,400 mateirals + 6,868 processing Total =
pounds to allocate cost:
using market value:
Then, we calcualte the gross margin under each method
Chicken drumsticks:
pounds 6,600 - 7,230.22 = -630,22
market value: 6,600 - 5,478 = 1,122
Breast:
pounds 13,000 - 9037,88 = 3,962.12
market value: 13,000 - 10.790 = 2,210.00