Fancy Foods produces two types of microwavable products: beef-flavored ramen and shrimp- flavored ramen. The two products share com.non inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Fancy dumps at negligible costs in a local drainage area. Due to the popularity of its microwavable products, Fancy decides to add a new line of products that targets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. In December 2018, all the Beef Ramen and Shrimp Ramen are now further processed into Special B and Special S. Following are the summary data for all the products in December 2018: Special B Special S Beef Ramen Shrimp Ramen $400,000 $100,000 25,000 $238,000 34,000 28,000 Joint Costs Separable further processing costs Production (tons) Transfer for further processing (ton) Sales (tons) Selling price per ton 20,000 20,000 28,000 $5 | $20 25,000 $17 | 34,000 | $33 Required: 1. Calculate Fancy's gross-margin percentage for Special B and Special S when joint costs are allocated using the following methods: a. Sales value at split-off point (3 points) b. Physical measure method (3 points) c. Net realizable value method (3 points) 2. Recently, Fancy discovered that the stock it is dumping can be sold to cattle ranchers at $4 per ton. In a typical month with the production levels shown, 6,000 tons of stock are produced and can be sold by incurring marketing costs of $12,400. Sandra Dashel, a management accountant, points out that treating the stock as a joint product and using the sales value at split-off method, the stock product would lose about $2,435 each month, so it should not be sold. a. How did Dashel arrive at that final number? (3 points) b. What do you think of her analysis, and should Fancy sell the stock? (3 points)