Allocating Joint Costs Using the Physical Units Method Sunny Lane, Inc., purchases peaches from local orchards and sorts them into four categories. Grade A are large blemish-free peaches that can be sold to gourmet fruit sellers. Grade B peaches are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Peaches to be sliced for canned peaches are even smaller than Grade B peaches and have blemishes. Peaches to be pureed for use in sauces are of lower grade than peaches for slices, yet still food grade for canning. Information on a recent purchase of 29,000 pounds of peaches is as follows: Grades Pounds Grade A 2,610 Grade B 7,250 Slices 11,600 Pureed 7,540 Total 29,000 Total joint cost is $21,750. Required: 1. Allocate the joint cost to the four grades of peaches using the physical units method. Joint Cost Grades Allocation Grade A Grade B Slices Pureed Total 2. Allocate the joint cost to the four grades of peaches by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent. Average cost - $ per pound. Joint Cost Grades Allocation Grade A Grade B $ Slices Pureed 3. What if there were 3,190 pounds of Grade A peaches and 6,670 pounds of Grade B? How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades? Joint Cost Grades Allocation Grade A Grade B Slices $ Pureed