Part A: The following two questions are also based on information in this question.

Case Ltd. Manufactures wood products. It purchases trees from local tree farmers and processes them up to the splitoff point, where two joint products (chopsticks and pencil casings) are obtained. The joint products are then sold to an independent company that markets and distributes them to retail outlets.

In the month of October, the company purchased 50 trees and processed them up to the split-off point to yield 30,000 pairs of chopsticks and 30,000 pencil casings.

The total joint cost, including the tree purchase was $1,500. They sold chopsticks at $0.04 per pair and pencil casings at $0.10 per casing.

The accounting department of the company reported no beginning inventories; however, ending inventory amounts reflected 1,000 pairs of chopsticks in stock.

Q. Allocate the joint cost to two joint products using the sales value at the splitoff point. Calculate the unit cost for each joint product after the allocation.

Q. Compute the reported value of Case Ltd's ending inventory.

Q. Based on your cost calculations and the sales prices of the products given, which of the two products appears to be more profitable, i.e. has a higher unit profit margin? Should the company focus on producing the more profitable product? Explain your answers.