1. Benson Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 14,000 pounds of raw chicken that costs $7,450, the company produces two parts: 2,500 pounds of drumsticks and 4,500 pounds of breast for a processing cost of $2,466. The chicken breast is further processed into 3,700 pounds of steak for a processing cost of $1,700. The market price of drumsticks per pound is $1.40 and the market price per pound of chicken steak is $3.70. If Benson decided to sell chicken breast instead of chicken steak, the price per pound would be $2.20.

Required

a-1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base.

Product	Allocation Rate	x	Weight of Base	=	Allocated Cost
Drumsticks		x		=
Chicken breast		x		=
Total allocated cost

a-2. Calculate the gross margin for each product.

	Chicken Drumsticks	Chicken Breast
Revenue
Cost of goods sold
Gross margin