Fitacorp Pharmaceutical Company purchases a material which is then processed to yield three chemicals: Anadrol, Oxybol, and Bethulyte. In February, Fitacorp processed 10,000 gallons of the material and incurred joint conversion costs of $320,000. February sales and production information are as follows:

Anadrol and Oxybol are sold to other pharmaceutical companies at the split-off point. Bethulyte can be sold at the split-off point or processed further and packaged for sale as an asthma medication.

Required:

1. Allocate the joint costs to the three products using the physical units method and the net realizable value method

2. Suppose Fitacorp also produce Dianabol, a byproduct that could be sold at $5 per gallon. The quantity of production and sales for Dianabol during February is5.375 gallons and 5.300gallons respectively.

1. Calculate the cost of Dianabol that would offset against the joint cost if Fitacorp using (1) Production method, and (2) Sales Method
2. Calculate the ending inventory of Dianabol if Fitacorp using (1) Production method, and (2) Sales method.

Fitacorp Pharmaceutical Company purchases a material which is then processed to yield three chemicals: Anadrol, Oxybol, and Bethulyte. In February, Fitacorp processed 10,000 gallons of the material and incurred joint conversion costs of $320,000. February sales and production information are as follows: Product Production Sales Value at Splitoff Point Separable Costs Selling Price Anadrol 2,000 $55 Oxybol 3,000 $40 Bethulyte 5,000 $30 $5 $60 Anadrol and Oxybol are sold to other pharmaceutical companies at the split-off point. Bethulyte can be sold at the split-off point or processed further and packaged for sale as an asthma medication. Required: 1. Allocate the joint costs to the three products using the physical units method and the net realizable value method 2. Suppose Fitacorp also produce Dianabol, a byproduct that could be sold at $5 per gallon. The quantity of production and sales for Dianabol during February is 5.375 gallons and 5.300 gallons respectively. a. Calculate the cost of Dianabol that would offset against the joint cost if Fitacorp using (1) Production method, and (2) Sales Method b. Calculate the ending inventory of Dianabol if Fitacorp using (1) Production method, and (2) Sales method