Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows: Joint CostCerealQuantity at Split-Off PointSales Price per Kilogram$30,000Yummies .....................12,000 kilograms .....................................$2.00Crummies .................... 8,000 kilograms .....................................2.50

Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $.50 per kilogram, and the mulch will sell for $3.50 per kilogram

Required: 1. Should Breakfasttimes management decide to process Crummies into the mulch? Why?

2. Suppose the company does process Crummies into the mulch. Use the net-realizable-value method to allocate the joint production cost between the mulch and the Yummies