Edmonton Chemical Company manufactures two industrial chemical products in a joint process. In May, 16,000 gallons of input costing $67,000 were processed at a cost of $161,000. The joint process resulted in 12,000 pounds of Resoline and 4,000 pounds of Krypto. Resoline sells for $20 per pound, and Krypto sells for $40 per pound. Management generally processes each of these chemicals further in separable processes to produce more refined chemical products. Resoline is processed separately at a cost of $6 per pound. The resulting product, Resolite, sells for $34 per pound. Krypto is processed separately at a cost of $5 per pound. The resulting product, Kryptite, sells for $51 per pound.

1. Allocate the companys joint production costs for May using the net-realizable-value method. (Do not round your intermediate calculations.)

Joint Products	Allocation of Joint Costs
Resoline
Krypto
Total

2. Edmontons management is considering an opportunity to process Kryptite further into a new product called Omega. The separable processing will cost $39 per pound. Packaging costs for Omega are projected to be $7 per pound, and the anticipated sales price is $90 per pound. Calculate the incremental profit or loss from processing Kryptite into Omega.

Incremental

Gain OR Loss ??

$ ???

Per Pound

* Please show work and bold or highlight correct answers in the charts above.