Company produces two pain relievers, premium & regular, through a joint process. Joint costs amount to $12,000 per batch of output. Each batch totals 10,000 grams: 60% premium and 40% regular. The drugs could be sold bulk at the splitoff point : $2,000/kg for Premium and $1,200/kg for Regular. Both products can be processed further, (packaged for retail in 10 gram packets) though there is a 10% loss of product in the process. Processing/ packaging costs $6.00 per package for each product. Packaged product sells for $30 (Premium) and $15 (Regular) per package. The company has never had a Controller before and managers don't understand what cost allocations do or why we would do that.

Please help do an analysis (Numbers and words) like a management report