Joint costs and byproducts. (W. Crum adapted) Royston, Inc., is a large food-processing company. It processes 150,000 pounds of peanuts in the peanuts department at a cost of $180,000 to yield 12,000 pounds of product A, 65,000 pounds of product B, and 16,000 pounds of product C.

?Product A is processed further in the salting department at a cost of $27,000. It yields 12,000 pounds of salted peanuts, which are sold for $12 per pound.

?Product B (raw peanuts) is sold without further processing at $3 per pound.

?Product C is considered a byproduct and is processed further in the paste department at a cost of $12,000. It yields 16,000 pounds of peanut butter, which are sold for $6 per pound.

The company wants to make a gross margin of 10% of revenues on product C and needs to allow 20% of revenues for marketing costs on product C. An overview of operations follows:

Joint Coats Separable Cous $180,000 12,000 pounds Salting Department Salted Peanuts 12.000 527.00 0 pounds $12/1b Peanuts Department Raw Peanuts Processing 65.000 of 150,000 1b pounds $3/1b Paste Department Peanut Butter 16.OOO 16,000 pounds Processing $12,000 pounds SplishT Point