31. (By-products and cost allocation) Bergen Productions produced two different movies from the same original footage (joint products). The company also generated revenue from admissions paid by fans touring the movie production set.

Bergen regards the net income from tours as a by-product of movie production.

The firm accounts for this income as a reduction in the joint cost before that joint cost is allocated to movies. The following information pertains to the two movies:

Products Total Receipts Separate Costs Movie 1 $ 4,000,000 $ 2,400,000 Movie 2 27,000,000 18,600,000 Tours 300,000 140,000 The joint cost incurred to produce the two movies was $8,000,000. Joint cost is allocated based on net realizable value.

a. How much of the joint cost is allocated to each movie?

b. How much profit was generated by each movie?