Sunland produces two joint products, Coconut Milk and Coconut Meat. The company uses the leftover Coconut Skin as a by-product. All three are produced from joint costs of $87500: direct materials amounting to $53000 and another $34500 for direct labor and manufacturing overhead. Beginning inventory for all three products is zero. Information for production of the product is as follows.

Product Units Produced in lbs Units Sold in lbs Sales Price per lb

Coconut Milk 22000 20500 $1.30

Coconut Meat 13500 11800 6.20

Coconut Skin 2900 2080 1.00

How much in joint costs should be allocated to the by-product, using the production method?

a. $0

b. $2900

c. $3818

d. $2080