Allocating joint product cost Lofton Food Corporation makes two products from soybeans: cooking oil and cattle feed. From a standard batch of 100,000 pounds of soybeans, Lofton produces 20,000 pounds of cooking oil and 80,000 pounds of cattle feed. Producing a standard batch costs $10,000. The sales prices per pound are $1.00 for cooking oil and $0.75 for cattle feed.

Required

a. Allocate the joint product cost to the two products using weight as the allocation base.

b. Allocate the joint product cost to the two products using market value as the allocation base.

Appendix