Baird 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 $13,000$ pounds of raw chicken that costs $$7,300,$ the company produces two parts: $2,000$ pounds of drumsticks and $4,000$ pounds of breast for a processing cost of $$1,555.$ The chicken breast is further processed into $3,200$ pounds of steak for a processing cost of $$1,600.$ The market price of drumsticks per pound is $$1\mathrm{.}35$ and the market price per pound of chicken steak is $$3\mathrm{.}60.$ If Baird decided to sell chicken breast instead of chicken steak, the price per pound would be $$2\mathrm{.}20.$

Required

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

a$-2.$ Calculate the gross profit for each product.

a$-3.$ If the drumsticks are producing a loss, should that product line be eliminated?

b$-1.$ Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base.

b$-2.$ Calculate the gross profit for each product.

c$-1.$ Should Baird further process chicken breasts into chicken steak? $($Use the assumption made in requirement b$-1).$

c$-2.$ How would the profit be affected by your answer in c$-1?$