Georgia Orchards produced a good crop of peaches this year. After preparing the following income statement, the company is concerned about the net loss on its No. 3 peaches.

GEORGIA ORCHARDS

Income Statement

For Year Ended December 31, 2017No. 1No. 2No. 3CombinedSales (by grade)No. 1: 204,000 Ibs. @ $2.20/lb$448,800No. 2: 204,000 Ibs. @ $1.80/lb$367,200No. 3: 1,360,000 Ibs. @ $0.15/lb$204,000Total sales$1,020,000CostsTree pruning and care @ $0.35/Ib71,40071,400476,000618,800Picking, sorting, and grading @ $0.10/Ib20,40020,400136,000176,800Delivery costs15,40015,40037,90068,700Total costs107,200107,200649,900864,300Net income (loss)$341,600$260,000$(445,900)$155,700

In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. The company's delivery cost records show that $30,800 of the $68,700 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The remaining $37,900 of delivery costs is for crating the No. 3 peaches and hauling them to the cannery.

Required:

1. Prepare reports showing cost allocations on a sales value basis to the three grades of peaches. Separate the delivery costs into the amounts directly identifiable with each grade. Then allocate any shared delivery costs on the basis of the relative sales value of each grade. (Do not round intermediate calculations.)