Refer to Cornerstone Exercise. Assume that Orchard Fresh, Inc., uses the sales-value-at-split-off method of joint cost allocation and has provided the following information about the four grades of apples:

Total joint cost is $18,000.
Required:
1. Allocate the joint cost to the four grades of apples using the sales-value-at-split-off method.
2. What if the price at split-off of Grade B apples increased to $1.20 per pound? How would that affect the allocation of cost to Grade B apples? How would it affect the allocation of cost to the remaining grades?

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Grades Grade A Grade B Slices Applesauce Pounds 1,600 5.000 8,000 5,400 20,000 Price at Split-Off (per lb.) $4.00 1.00 0.50 0.10 Total