Rundle 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 $$8,800,$ the company produces two parts: $4,000$ pounds of drumsticks and $5,400$ pounds of breast for a processing cost of $$7,805.$ The chicken breast is further processed into $4,600$ pounds of steak for a processing cost of $$2,600.$ The market price of drumsticks per pound is $$1\mathrm{.}75$ and the market price per pound of chicken steak is $$4\mathrm{.}60.$ If Rundle decided to sell chicken breast instead of chicken steak, the price per pound would be $$2\mathrm{.}50.$

Required

a$-1.$ Allocate the joint cost to the joint products, drumsticks and breasts, using weight as the allocation base.

a$-2.$ Calculate the gross profit for each product.

a$-3.$ If the drumsticks are producing a loss, should that product line be eliminated?

b$-1.$ Reallocate the joint cost to the joint products, drumsticks and breasts, using relative market values as the allocation base.

b$-2.$ Calculate the gross profit for each product.

c$-1.$ Should Rundle further process chicken breasts into chicken steak? $($Use the assumption made in requirement $b-).$

c$-2.$ How would the profit be affected by your answer in $c-1?$

Complete this question by entering your answers in the tabs below.

Req A$1$

Req $A2$

Req $A3$

Req B$1$

Req B$2$

Req C$1$

Req C$2$

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

Note: Round "Allocation rate" to $2$ decimal places.

$\backslash$table$[[$Product$,$Allocation Rate,$$ Weight of Base,$=$ Allocated Cost,$],[$Drumsticks$,,x,,],[$Chicken breast,,$,=,],[$Total allocated cost,,,,$]]$