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Workshop Joint Products and By Products 16-22 Joint cost allocation sales value. physical measure, NRw methods. Instant Foods produces two types of microwavable products-beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which instant dumps at negligale costs in a local drainage area In June 2012, the following data were reported for the production and sales of beef-navored and shrimp-flavored ramenc Joint costs Joint costs (oosts of noodes, spices, and other L2 inputs and processingtospitof poin0 $240,000 5 Beginning inven 6 Production Sales Due to the popularity of its microwavable products, Instant docides to add a new line of products that tar- gets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Specials. respectively. The following is the monthlydata for all the products: Page layout 11 Joint Costs Special B Special S costs costsof noodles spioes, and other 12 inputs and processing lo splto point) $240,000 Separable costs of processing 10.000 tons of 13 Beef Rameninto 12.000 tons of Special B $48,000 Separable cost of processing 20,000 tons of 14 Shrimp Ramenito24000 tons of Specia S Ramen Ramen Special B Special s 17 Beginning inventoyaons) 18 10000 20000 19 Transferior further processing tons) 20 Sales tons) 21 Salingpioe per ton 1. Calculate Instant's gross-margin pereentage for Special Band Special S whan joint costs are allo- cated using the following: a. Sales value at spiooft method b. Physicalmeasure method c. Net realizable value method 2. Recently, Instant discoveredthat the ateckitisdumping can be sold to cattle ranchers atss perton.In a typical month with the production levels shown,4000 tons of stockare produced and can be sold by incurring marketing costs of S10800 Sherrie Dong, a management accountant, pointsoutthattreating the stock as a joint product and using the sales value at splitoff method, the stock productwouldlase about S2228 each month, so it should not be sold. How did Dong arrive atthat finalnumber and what do you think olher analysis? Should Instant sell the stock

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