16-22 Joint-cost allocation, sales value, physical measure, NRV methods. Instant Foods produces twotypes of microwavable productsbeef-flavored ramen and shrimp-flavored ramen. The two products sharecommon inputs such as noodle and spices. The production of ramen results in a waste product referred toas stock, which Instant dumps at negligible costs in a local drainage area. In June 2012, the following datawere reported for the production and sales of beef-flavored and shrimp-flavored ramen: 0 20,000$ 15 20,00012345678A B CJoint costs (costs of noodles, spices, and otherinputs and processing to splitoff point)BeefRamenShrimpRamenBeginning inventory (tons) 0P roduction (tons) 10,000S ales (tons) 10,000S $ elling price per ton 10Joint Costs$240,000Due to the popularity of its microwavable products, Instant decides to add a new line of products that targetsdieters. These new products are produced by adding a special ingredient to dilute the original ramenand are to be sold under the names Special B and Special S, respectively. The following is the monthly datafor all the products:$ 18 $ 25 24,000 24,000$ 15 12,000 0 20,000 20,0001112131415161718192021A B C D ESpecial B Special SJoint costs (costs of noodles, spices, and otherinputs and processing to splitoff point)Separable costs of processing 10,000 tons ofBeef Ramen into 12,000 tons of Special B $48,000Separable cost of processing 20,000 tons ofShrimp Ramen into 24,000 tons of Special S $168,000BeefRamenShrimpRamen Special B Special SBeginning inventory (tons) 0 00Production (tons) 10,000Transfer for further processing (tons) 10,000Sales (tons) 12,000Selling price per ton 10 $Joint Costs$240,0001. Calculate Instants gross-margin percentage for Special B and Special S when joint costs are allo- Requiredcated using the following:a. Sales value at splitoff methodb. Physical-measure methodc. Net realizable value method2. Recently, Instant discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. Ina typical month with the production levels shown, 4,000 tons of stock are produced and can be sold byincurring marketing costs of $10,800. Sherrie Dong, a management accountant, points out that treatingthe stock as a joint product and using the sales value at splitoff method, the stock product would loseabout $2,228 each month, so it should not be sold. How did Dong arrive at that final number, and whatdo you think of her analysis? Should Instant sell the stock?