Innerva Soy Products (MSP) buys soybeans and processes them into other soy products. Each ton of soybeans that MSP purchases for $340 can be converted for an additional $220 into 500 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.24 and soy oil can be sold in bulk for $4 per gallon.

MSP can process the 500 pounds of soy meal into 550 pounds of soy cookies at an additional cost of $320. Each pound of soy cookies can be sold for $2.24 per pound. The 80 gallons of soy oil can be packaged at a cost of $270 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.25.

Complete the diagram below.

Cookies/ Soyolal Soy Oil $ Soy Meal $ Total Sales value of total production at splitoff $ Weighting Joint costs allocated $ $ $ 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.) Cookies Soyola Total Final sales value of total production $ $ $ Deduct separable costs $ $ $ Net realizable value Weighting Joint costs allocated $ $ $ Requirement 2. Should ISP 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 ISP processed the products further. (Use parentheses or a minus sign for losses.) Cookies/ Soyolal Soy Meal Soy Oil Sell at splitoff: Revenue $ $ $ Process further : NRV Profit (Loss) from processing further $ $