Nestl produces chocolate and coffee using the same process. In May 2040, the company incurs the following costs: Total Joint Costs: $18,000,000 Chocolate Units Produced:

Nestlé produces chocolate and coffee using the same process. In May 2040, the company incurs the following costs:

• Total Joint Costs: $18,000,000
• Chocolate Units Produced: 2,500,000 units
• Coffee Units Produced: 1,500,000 units

Requirements:

• Allocate joint costs using the sales value at split-off method.
• Calculate the cost per unit for chocolate and coffee.
• Prepare a joint cost allocation report.
• Analyze the profitability of each product.
• Recommend strategies to optimize the production process.