Mays Company can sell all of Product A that it produces but only 160,000 units of Product Z. The company has limited production capacity and has 180,000 production hours available. Production hours per unit for Product A is 1.0 hour and for Product Z is 0.6 hour. Contribution margin per unit is $72 for Product A and $60 for Product Z. What is the most profitable sales mix for Mays Company?

California Company reports the following sales data for the year ended December 31.

Grade of Walnuts	Sales
Number 1	$ 900,000
Number 2	600,000
Number 3	375,000
Total	$ 1,875,000

The company incurred the following joint costs for the year.

Tree pruning and care	$ 810,000
Pickup, sorting, and grading	405,000

Required: (1) Use the value basis to allocate joint costs to the three grades of walnuts. (2) Compute gross profit for each of the three grades of walnuts.