Byproducts Tivoli Labs produces a drug used for the treatment of hypertension. The drug is produced in batches. Chemicals costing S60,000 are mixed and heated, creating a reaction; a unique separation process mixture. A batch yields a total of 2,500 gallons of the chemicals. The first 2,000 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. then extracts the drug from the The costs of mixing, heating, and extracting the drug amount to $90,000 per batch. The output sold for human use is pasteurized at a total cost of $120,000 and is sold for S585 per gallon. The product sold to veterinarians is irradiated at a cost of $10 per gallon and is sold for $410 per gallon. In March, Tivoli, which had no opening inventory, processed one batch of chemicals. It sold 1,700 gallons of product for human use and 300 gallons of the veterinarian product. Tivoli uses the net realizable value method for allocating joint production costs. Required: How much in joint costs does Tivoli allocate to each product? 2. Compute the cost of ending inventory for each of Tivoli's products. 3.If Tivoli were to use the constant gross-margin percentage NRV method instead, how would it allocate its joint costs? 4. Calculate the gross margin on the sale of the product for human use n March under the constant percentage NRV method. 5.Suppose that the separation process also yields 300 pints of a toxic byproduct. Tivoli currently pays a hauling company S5,000 to dispose of this byproduct. Tivoli is contacted by a firm interested in purchasing a modified form of this byproduct for a total price of S6,000. Tivoli estimates that it will cost about S30 per pint to do the required modification. Should Tivoli accept the offer