Herz Corporation processes soybeans into soybean oil and other products in a joint process. The common costs allocated to soybean oil are $2.00 per gallon. The soybean oil can either be sold for $1.90 or processed into margarine. The cost to process one gallon of soybean oil into margarine is $1.20. Each gallon of soybean oil yields 3 pounds of margarine, which sells for $0.80 per pound. Required: 1) What is the net benefit of processing the soybean oil into margarine, relative to selling the soybean oil at the split-off point? (A) A gain of $1.20 per gallon of soybean oil processed (B) A gain of $1.30 per gallon of soybean oil processed (C) A loss of $0.80 per gallon of soybean oil processed (D) A loss of $0.70 per gallon of soybean oil processed

2) What should Herz Corporation do? (A) Process the soybean oil into margarine. (B) Sell the soybean oil at the split-off point. (C) Stop producing soybean oil. (D) Herz's best course of action cannot be determined from the information provided.