Problem 9-5AB Allocation of joint costs LO C3 The following information applies to the questions displayed below. Georgia Orchards produced a good crop of peaches this year. After preparing the following Income statement, the company belleves It should have given its No. 3 peaches to charlty and saved its efforts. GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2015 No. 1 No. 2 No. 3 Combined Sales (by grade) No. 1: 350.000 lbs. $1.50/lb $525,000 315,000 No. 2: 350,000 lbs. $0.90/lb 210,000 No. 3: 600,000 lbs. $0.35/lb $1,050,000 Total sales Costs Tree pruning and care $0.30/lb 105,000 105,000 180,000 390.000 70,000 70,000 PIcking, sortling, and grading $0.20/lb 120,000 260,000 Delivery costs 68,400 15,300 15,300 37800 718,400 Total costs 337800 190,300 190,300 331,600 Net Income (loss) In preparing this statement, the company allocated Jolnt costs among the grades on a physical basis as an equal amount per pound. The company's delivery cost records show that $30,600 of the $68,400 relates to crating the No. 1 and No. 2 peaches and hauling them to the buyer. The rem alning $37800 of delivery costs ls for crating the No. 3 peaches and hauling them to the cannery