Grassy Fertilizer manufactures two lines of garden grade fertilizer as part of a joint production process: GF10 and GF20. Joint costs up to the split-off point total $85,000 per batch. These joint costs are allocated to GF10 and GF20 in proportion to their relative sales values at the split-off point of $40,000 and $60,000, respectively.

Both lines of garden grade fertilizer can be further processed into commercial grade fertilizer. The following table summarizes the costs and revenue associated with additional processing of GF10 and GF20:

	Additional Processing Costs	Final Selling Price per Batch of Commercial Grade Fertilizer
GF10	$ 18,000	$ 67,000
GF20	$ 38,000	$ 97,000

Required:

Answer the following questions:

(A) How should the $85,000 in joint costs be allocated to (1) GF10 and (2) GF20?

(B) Which product (GF10 or GF20) would result in a net decrease in operating income if processed into a commercial grade fertilizer?

(C) Which product (GF10 or GF20) would result in a net increase in operating income if processed into a commercial grade fertilizer?