Colorado Steak Company (CSC) uses a joint process to manufacture three types of beef: roasts, steaks, and ground beef. Each product can be sold at the point of separation, or it can be processed further. All additional processing costs are directly traceable to each product that is processed further. Joint production costs for the year are $140,000 and are allocated to all three products on the basis of their sales values at the point of separation. The pertinent data accumulated by the accounting department for these products are:

1. Which products should CSC process further (after separation) in order to maximize its profits? Show computations.
2. Explain why you did or did not use the allocated joint costs in deciding which of the products to processfurther.

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Sales Value and Additional Costs of Processing Further Allocation of Joint Costs Sales Value at Separation Additional Sales Value Product Steak Roast Ground beef Units Costs 18,000 20,000 10,000 $150,000 S70,000 S190,000 S24,000 25,000 30,000 14,000 60,000