Joint cost allocation Lovely Lotion Inc. produces three different lotions: hand, body, and foot. The lotions are produced jointly in a mixing process that costs a total of $250 per batch. At the split-off point, one batch produces 80, 40, and 25 bottles of hand, body, and foot lotion, respectively. After the split-off point, hand lotion is sold immediately for $2.50 per bottle. Body lotion is processed further at an additional cost of $0.25 per bottle and then sold for $5.75 per bottle. Foot lotion is processed further at an additional cost of $0.85 per bottle and then sold for $4.00 per bottle. Assume that body and foot lotion could be sold at the split-off point for $3.00 and $3.20 per bottle, respectively. 1. Using the market value at split-off method, allocate the joint costs of production to each product. Round your answers to two decimal places. Market Value per Bottle at Split-Off Bottles per Batch Total Market Value at Split-Off Percent of Total MV at Split-Off Joint Product Joint Costs Allocation Hand lotion Body lotion % Foot lotion Totals 2. A lotion manufacturing company produces three types of lotions. After the split-off point the company continues to sell the body lotion and makes $0.25 profit per bottle. The foot lotion generates $0.05 loss per bottle if it continues after the split-off point. Which lotion should be continued after the split-off point? a. Hand lotion b. Body lotion c. Foot lotion d. Body and foot lotion V. buu) IULIUI c. Foot lotion d. Body and foot lotion b 3. Allocate the joint costs of production to each product using the net realizable value method. Round your answers to two decimal places. Market Value per Bottle at Split-Off Bottles per Batch Total Market Value at Split-Off Greater of Total NRV and Total Market Value at Split-Off Market Price per Bottle Added Cost per Bottle Total Net Realizable Value NRV per Bottle Joint Product Hand lotion Body lotion Foot lotion Totals Feedback Check My Work The costs incurred in a joint manufacturing process are called joint costs. Joint costs are inseparable before the split-off point. The split-off point is that point in the production process where the joint products become separable