Zephyr Chemical Company s production process for two of its solvents
Zephyr Chemical Company’s production process for two of its solvents can be diagrammed as follows:


The cost of the joint input, including processing costs before the split-off point, is $100,000. Solvent A can be sold at split-off for $10 per gallon and solvent B for $15 per gallon.
1. Allocate the $100,000 joint cost to solvents A and B by the physical-units method.
2. Allocate the $100,000 joint cost to solvents A and B by the relative-sales-valuemethod.
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