Cost Accounting

(Processing beyond split-off and cost allocations) All-A-Buzz makes three products from a joint production process using honey. Joint cost for the process in 2010 is $123,200.

		Per Unit	Incremental
	Units of	Selling Price	Processing	Final Sales
Product	Output	at Split-Off	Cost	Price
Honey butter	10,000	4.00	$3.00	$ 6.00
Honey jam	20,000	6.40	4.00	14.00
Honey syrup	1,000	3.00	0.40	3.60

Each container of honey butter, jam, and syrup, respectively, contains 16 ounces, 8 ounces, and 3 ounces of product.

a. Determine which products should be processed beyond the split-off point.

b. Assume honey syrup should be treated as a by-product. Allocate the joint cost based on units produced, weight, and sales value at split-off. Use the net realizable value method in accounting for the by-product. (Round to nearest whole percentage.)