Elsa Products processes Chem-Z into two products: Chem-A and Chem-B. Chem-Z costs $43,400 per batch. The joint process produces 3,000 units of Chem-A with a market value of $154,600, and 12,000 units of Chem-B with a market value of $36,550. The conversion cost of the joint process is $9,000 per batch. Elsa Products allocates joint costs using the physical quantities method. The company never holds any inventory.

Required:

What cost (total, not unit) and profit will be reported for each product using the current method for allocating joint costs?

Realizable Value, Allocation of Joint Cost, Reported Profit

If the costs of the joint process are allocated on the basis of the net realizable value of the products, what cost (total, not unit) and profit will be reported for each product?