16-22 Joint-cost allocatioaat. . p.ysical measure.milk instint Foods produces two types of microwavable products-beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodie and spices. The production of ramen results in a waste product referred to as stock, which Instant dumps at negligible costs in a local drainage area. In June 2012, the following data were reported for the production and sales of beet-flavored and shrimp-flavored ramen Page layout Joint Costs Joint costs (costs of noodies, spices, and other inputs and processing to spltof poirg) $240,000 Ramen Ramen 6 Production (lons) 7 Sales (tons) 8 Selling price per lon 10000 20000 10.000 20000 15 10 Due to the popularity of its microwavable products, Instant decides to add a new line of products that tar gets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. The following is the monthly data for all the products: Joint Costs Special B Special S oint costs (costs of noodles, spices, and other 12 nouts and processing to splidoff poing) $240,000 costs of processing 10,000 tons of 13 Beef Ramen into 12,000 tons of Special B Separable cost of processing 20,000 tons of 14 Shrimp Ramen into 24,000 tons of Special S 15 168.000 Ramen Ramen Special B Special S 10,000 20,000 12000 24,000 12000 24,000 Beef Shrimp 16 18 Production (lons) 19 Transfer for further processing ftons) 20 Sales (tons 21 Selling price per ton 10000 20.000 S 10$ 15S 18 S 25 1. Calculate Instant's gross-margin percentage for Special B and Special S when joint costs are allo cated using the following b. Physical-measure method 2. Recently, Instant discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton In a typical month with the production levels shown, 4,000 tons of stock are produced and can be sold by incurring marketing costs of $10,800. Sherrie Dong, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $2,228 each month, so it should not be sold. How did Dong arrive at that final number, and what de you think of her analysis? Should Instant sel th tock