EXAMPLE $7\mathrm{.}7$

Sunny Lane, Inc., purchases peaches from local orchards and sorts them into four categories. Grade A are large blemish$-$free peaches that can be sold to gourmet fruit sellers. Grade B peaches are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Peaches to be sliced for canned peaches are even smaller than Grade B peaches and have blemishes. Peaches to be pureed for use in sauces are of lower grade than peaches for slices, yet still food grade for canning. Information on a recent purchase of $20,000$ pounds of peaches is as follows:

Details

Total joint cost is $$18,000.$

REQUIRED:

Allocate the joint cost to the four grades of peaches using the physical units method. $($Carry out the percent calculations to four significant digits.$)$

Allocate the joint cost to the four grades of peaches by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. $($Round all cost allocations to the nearest dollar.$)$

What if there were $2,000$ pounds of Grade A peaches and $4,500$ pounds of Grade B$?$ How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades?