Quality Chicken grows and processes chickens. Each chicken is disassembled into five main parts. Information pertaining to production in July 2017 is as follows:

Parts Pounds of ProductWholesale Selling Price per Pound When

Production Is Complete

Breasts...........................100............................................................$0.55

Wings..............................20..............................................................0.20

Thighs.............................40..............................................................0.35

Bones..............................80..............................................................0.10

Feathers...........................10..............................................................0.05

Joint cost of production in July 2017 was $50.

A special shipment of 40 pounds of breasts and 15 pounds of wings has been destroyed in a fire. Quality Chicken's insurance policy provides reimbursement for the cost of the items destroyed. The insurance company permits Quality Chicken to use a joint-cost-allocation method. The splitoff point is assumed to be at the end of the production process.

Required:

1. Compute the cost of the special shipment destroyed using the following:

a. Sales value at splitoff method

b. Physical-measure method (pounds of finished product)

2. What joint-cost-allocation method would you recommend Quality Chicken use? Explain.