Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows:

Joint Cost			Cereal	Quantity at Split-Off Point			Sales Price per Kilogram
$	92,000		Yummies		12,200	kilograms	$	6.20
			Crummies		8,200	kilograms		7.70

Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $1.70 per kilogram, and the mulch will sell for $11.50 per kilogram.

Required:

1-a.	Compute the net incremental revenue per kilogram if management decide to process Crummies into the mulch. (Round your answer to 2 decimal places.)

1-b.

Should Breakfasttimes management decide to process Crummies into the mulch?

Yes

No

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. (Round your calculation of relative proportions to 3 decimal places.)