By-Product Costing—Market Value (Reversal Cost) Method. Logan Company manufactures one main prod¬ uct and two by-products, A and B. For April, the following data are available: LO5 Main By-Product Product A

B Total Sales.

$75,000

$6,000

$3,500

$84,500 Manufacturing cost after separation.

Marketing and administrative expenses.

Manufacturing cost before separation.

$11,500 6,000

$1,100 750

$ 900 550

$13,500 7,300 37,500 Profit allowed for A and B is 15% and 12%, respectively.

Required:

(1) Calculate manufacturing cost before separation for by-products A and B, using the market value (reversal cost) method.

(2) Prepare an income statement, detailing sales and costs for each product.