a.

	Grade I	Grade II	Grade III	Total
Number of stones per batch	70	105	175	350
Percent of stones	20%	30%	50%	100%
Allocated cost to each grade	$7,000	$10,500	$17,500	$35,000
Allocated joint cost per stone	$100	$100	$100	$300

b.

	Grade I	Grade II	Grade III	Total
Selling price per stone	$800	$300	$110	$1,210
Additional cost to package and sell each stone	$250	$120	$5	$375
Net realizable value per stone	$550	$180	$105	$835
X Number of stones per batch	70	105	175	350
Net realizable value per batch	$38,500	$18,900	$18,375	$75,775
Percent of net realizable value per batch	50.81%	24.94%	24.25%	100%
Allocated cost to each grade	$17,783	$8,730	$8,487	$35,000
Allocated joint cost per stone	$254.04	$83.14	$48.50	$100

c.

Income taxes based on number of stones:	Grade I	Grade II	Grade III	Total
Revenue
Allocated joint cost (based on number of stones)
Additional packaging and selling cost
Net income before taxes
Income taxes
Income taxes based on NRV:
Revenue
Allocated joint cost (based on nrv)
Additional packaging and selling cost
Net income before taxes
Income taxes