Macon Farms raises peaches that, at harvest, are separated into three grades: premium, good, and fair. Joint cost is allocated to products based on bushels of output. The $337,500 joint cost for one harvest yielded the following output quantities.
Product Output in Bushels
Premium ........ 14,520
Good .......... 38,940
Fair .......... 12,540
The joint process also created a by-product that had a total net realizable value of $45,000. The company records the by-product inventory at the time of production.
Allocate the joint cost to the joint products using bushels of output.