. Dairy Farmers Inc. produce three products from a joint process of harvesting their cows milk (butter, cream, and cheese). All three products require additional processing after the split off point in order to comply with FDA regulations. Total Joint costs per processing batch are $315,000. Other product information is shown below.

Butter Cream Cheese

Units produced per batch 20,000 30,000 50,000

Further processing and

marketing cost per unit $ .70 $3.00 $1.72

Final sales value per unit 5.00 6.00 7.00

If Dairy Farmers Inc uses the net realizable value method of allocating joint costs, how much of the joint costs will be allocated to each unit of cheese?

a. $2.10.

b. $2.65.

c. $3.15.

d $3.78.