Illion Soy Products (ASP) buys soybeans and processes them into other soy products. Each ton of soybeans that ASP purchases for $360 can be converted for an additional $170 into 650 lbs of soy meal and 140 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.16 and soy oil can be sold in bulk for $4 per gallon. ASP can process the 650 pounds of soy meal into 700 pounds of soy cookies at an additional cost of $340. Each pound of soy cookies can be sold for $2.16 per pound. The 140 gallons of soy oil can be packaged at a cost of $240 and made into 560 quarts of Soyola. Each quart of Soyola can be sold for $1.45. Read the requirements. Requirements 1. Allocate the joint cost to the cookies and the Soyola using the following: a. Sales value at splitoff method b. NRV method 2. Should ASP have processed each of the products further? What effect does the allocation method have on this decision? Requirement 1. Allocate the joint cost to the cookies and the Soyola using the (a) Sales value at splitoff method and (b) NRV method. a. First, allocate the joint cost using the Sales value at splitoff method. (Round the weights to three decimal places and joint costs to the nearest dollar.) Cookies/ Soyolal Soy Meal Soy Oil $ 884 $ 380 $ Total 1,264 Sales value of total production at splitoff Weighting Joint costs allocated 0.699 0.301 1.000 1 $ 336 $ 144 $ 480 b. Now allocate the joint cost to the cookies and the Soyola using the NRV method. (Round the weights to three decimal places and joint costs to the nearest dollar.) Total Cookies Soyola $ 1,652 $ 464 $ Final sales value of total production 2,116 350 220 570 Deduct separable costs $ 1,302 $ 244 $ 1,546 Net realizable value Weighting 1 0.158 1.000 0.842 404 $ Joint costs allocated $ 76 $ 480 Requirement 2. Should KSP have processed each of the products further? What effect does the allocation method have on this decision? Begin by calculating the profit or loss that would occur if KSP processed the products further. (Use parentheses or a minus sign for losses.) Cookies/ Soyolal Soy Meal Soy Oil $ 884 $ 380 Sell at splitoff: Revenue $ 1,302 $ 244 Process further : NRV Profit (Loss) from processing further $ 418 $ (136) KSP should process further the soy meal because it increases profit. They should sell as is the soy oil because profit will be higher if they do'. Since the total joint cost is the same under both allocation methods, it is not a relevant cost to the decision to sell at splitoff or process further