Munoz Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 16,000 pounds of raw chicken that costs $8,500, the company produces two parts: 2,400 pounds of drumsticks and 5,200 pounds of breast for a processing cost of $4,748. The chicken breast is further processed into 4,400 pounds of steak for a processing cost of $2,400. The market price of drumsticks per pound is $1.70 and the market price per pound of chicken steak is $4.40. If Munoz decided to sell chicken breast instead of chicken steak, the price per pound would be $2.40.

A1. Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base.

Product	Allocation Rate	x	Weight of Base	=	Allocated Cost
Drumsticks		x		=	$
Chicken Breast		x		=

A2- Calculate the gross margin for each product.

	Chicken Drumsticks	Chicken Breast
Revenue
Cost of goods sold
Gross margin	$0	$0