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So Sweet Inc. processes cows milk that produces two joint products Cheese and Butter. At split-off, Cheese can be sold for $10.00 per pound and
So Sweet Inc. processes cows milk that produces two joint products Cheese and Butter. At split-off, Cheese can be sold for $10.00 per pound and Butter can be sold for $20.00 per pound. It costs $150 to produce a batch of Cheese and Butter. Each batch contains 25 pounds of Cheese and 10 pounds of Butter. The sales manager has advised that a batch of 10 pounds of Butter can be processed further at an additional cost of $30. With this additional processing, the 10 pounds of Butter can be sold for $25.00 a pound. Using the physical measurement method, the cost allocated to Butter is
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