Timpanogos Clinical Laboratories Inc. manufactures two products: Mackalite and Jemmerite. These two products go through a joint production process costing $260,000 in materials, labor, and overhead. Though the production process is inseparable for both products, the production of Mackalite is only possible by heating the joint product (before the split-off point) to 600 degrees Fahrenheit. Jemmerite only needs to be heated to 300 degrees, but higher temperatures do not hurt Jemmerite production. Following the joint production process, 500 gallons of Mackalite are available, and 200 gallons of Jemmerite are available. No further processing is necessary for either product, and both products sell for $60 per gallon.

The production manager for the Mackalite product line argues that, since the two products come from an inseparable process, Mackalite and Jemmerite should both share 50% of the $260,000 in joint costs.

Without providing actual calculations, write a brief memo to the CFO of Timpanogos Clinical Laboratories explaining why you agree or disagree with the Mackalite production manager’s argument.