46. (Ending inventory valuation; joint cost allocation) Gainesville Meat Packers experienced the operating statistics in the following table for its joint meat cutting process during March 2000, its first month of operations. The costs of the joint process were direct material, $20,000; direct labor, $11,700; and overhead,

$5,000. Products X, Y, and Z are main products; B is a by-product. The company’s policy is to recognize the net realizable value of any by-product inventory at split-off and reduce the total joint cost by that amount. Neither the main products nor the by-product require any additional processing or disposal costs, although management may consider additional processing.

Weight in Sales Value Units Units Products Pounds at Split-Off Produced Sold X 4,300 $66,000 3,220 2,720 Y 6,700 43,000 8,370 7,070 Z 5,400 11,200 4,320 3,800 B 2,300 2,300 4,600 4,000

a. Calculate the ending inventory values of each joint product based on (1)

relative sales value and (2) pounds.

b. Discuss the advantages and disadvantages of each allocation base for (1)

financial statement purposes and (2) decisions about the desirability of processing the joint products beyond the split-off point.