(Approximated net realizable value method) Hanna Chemical Company makes three products that can either be sold or processed further and then sold. The costs associated with the Hanna joint process is $60,000.

Per unit, Chemical 1 weighs 3 pounds, Chemical 2 weighs 2 pounds, and Chem- ical 3 weighs 3 pounds. Assume that all additional processing is undertaken.

a. Allocate the joint cost based on the units of output, weight, and approximated net realizable value at split-off.

b. Assume all products are additionally processed and completed. At the end of the period, the inventories are as follows: Chemical 1-500 units; Chemical 2-1,000 units; Chemical 3-1,500 units. Determine the values of the in- ventories based on answers obtained in part a.LO1 

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SALES SEPARATE FINAL PRODUCT UNITS OF OUTPUT PRICES AT SPLIT-OFF COSTS AFTER SALES SPLIT-OFF PRICE Chemical I 7,500 $3.00 $1.00 $4.25 Chemical 2 10,000 2.00 .50 3.00 Chemical 3 12,500 2.00 .75 3.00