Strawberry Sweet Company makes a variety of jams and jellies. During June, 55,000 gallons of strawberry mash was processed at a joint cost of $40,000. This produced 42,000 gallons of preserve-grade mix and 4,000 gallons of strawberry juice for jelly. The juice could be processed further into energy drinks, and the preserve mix could be processed further into ice cream flavoring. Information on these items is shown:

A. Assume that the joint cost is allocated to the products based on the physical quantity of output of each product. How much joint cost should be assigned to each product?

B. How much joint cost should be assigned to each product if the relative sales value allocation method is used?

C. Which products should be processed further?

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Product Preserve mix Juice for jelly Sales Value at Split-Off Point $104,500 50,500 Estimated Further Processing Cost $ 8,000 40,000 Sales Value after Processing $125,000 70,000