Meritt Industries is a manufacturer of chemicals for various purposes. One operation produces SPL-3, a chemical used in swimming pools; PST-4, a chemical used in pesticides; and RJ-5, a by-product that is sold to fertilizer manufacturers. The company uses the market value of its main products to allocate joint production costs, and the fifo inventory method to cost the main products. The by-product is inventoried at its market value less its disposal cost, and this value is used to reduce the joint production cost before allocation to the main products.
Data regarding November operations are presented in the following table. During this month, joint production cost of $1,702,000 were incurred in the manufacture of SPL-3, PST-4, and RJ-5.

Required:
(1) Determine the allocation of joint production cost for November.
(2) Compute the cost assigned to the finished goods inventories for SPL-3, PST-4, and RJ-5 as of November 30.
(3) The company has an opportunity to sell PST-4 at the split-off point for $3.80 per gallon. Prepare an analysis showing whether the company should sell PST-4 at the split-off point or continue to process this product further.

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SPL-3 PST4 RJ-5 Finished goods inventory in gallons (November 1) November sales in gallons.. November production in gallons.. Sales value per gallon at split-off…++ " 52,000 3,000 325,000 150,000 700,000 350,000 170,000 $ 70 18,000 650,000 $874,000 $816,000 $ 4.00 6.00 Final sales value per gallon. Disposal cost of $.10 per gallon, which are incurred to sell the product, have not been deducted to arrive at this sales value.