Wear Art produces precut fabrics for three products: dresses, jackets, and blouses. Joint cost is allocated on the basis of relative sales value at split-off. The company can choose to process each of the products further rather than sell the fabric at split-off. Information related to these products follows.

a. What amount of joint cost should be allocated to dresses and blouses?

b. What is the sales value at the split-off point for dresses?

c. Should any of the products be processed beyond the split-off point? Show computations.

d. If 12,000 jackets are processed further and sold at the regular selling price, what is the gross profit on the sale?

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Number of units produced Joint cost allocated...... Sales values at split-off point. Additional costs of processing further. Sales values after all processing Dresses Jackets Blouses Total 10,000 ? 16,000 $138,000 6,000 32,000 ? $360,000 ? $230,000 $ 80,000 $600,000 $ 26,000 $ 20,000 $ 78,000 $124,000 $300,000 $268,000 $210,000 $778,000