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Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows:

Joint Cost			Cereal	Quantity at Split-Off Point			Sales Price per Kilogram
$	91,000		Yummies		12,100	kilograms	$	6.10
			Crummies		8,100	kilograms		7.60

Breakfasttime Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $1.60 per kilogram, and the mulch will sell for $11.00 per kilogram.

Required:

1-a.

Compute the net incremental revenue per kilogram if management decide to process Crummies into the mulch. (Round your answer to 2 decimal places.)

2.

Suppose the company does process Crummies into the mulch. Use the net-realizable-value method to allocate the joint production cost between the mulch and the Yummies. (Round your calculation of relative proportions to 3 decimal places.)

	Allocation of Joint Cost
Yummies
Mulch