Lauren Inc. makes three products that can be sold at split-off or processed further and then sold. The joint cost for April is \(\$ 1,080,000\).

The number of ounces in a bottle of each product is: perfume, one; eau de toilette, two; and body splash, three. Assume that all products are processed further after split-off.

a. Allocate the joint cost based on the number of bottles, weight, and approximated net realizable values at split-off. (Round proportions to the nearest whole percentage and dollar amounts to the nearest whole dollar.)

b. Assume that all products are processed further and completed. At the end of the period, the inventories are as follows: perfume, 600 bottles; eau de toilette, 1,600 bottles; and body splash, 1,680 bottles. Determine the values of the inventories based on answers obtained in (a). (Round your final answer to the nearest whole dollar.)

c. Do you see any problems with the allocation based on approximated net realizable value?

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Bottles of Product Output at Split-Off Sales Price Separate Cost after Split-Off Final Sales Price Perfume.... 20,000 $7.00 $2.50 $16.50 Eau de toilette. 32,000 5.00 1.50 13.00 Body splash 28,000 5.00 2.00 12.00