Refer to the facts in Exercise 11-51. After the publication of recent scientific test results, the government has banned the sale of product KC. If KC is produced, it must be disposed of in an approved way that costs $171,000 for every 24,000 units produced.

Required
a. Assuming that Kyle Company continues to use the physical quantities method of allocation, what joint costs will be allocated to KA and to KB, respectively?
b. Which, if either, product would you recommend Kyle Company sell at split-off?

Exercise 11-51

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If Processed Further Units Sales Value Sales Values Additional Product Produced at Split-Off Costs KA 84,000 $240,000 $330,000 $54,000 KB 60,000 210,000 270,000 42,000 KC 24,000 150,000 240,000 30,000