2- Joint-cost allocation, sales value, physical measure, NRV methods. Instant Foods produces two types of microwavable products-beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Instant dumps at negligible costs in a local drainage area. In June 2017, the following data :were reported for the production and sales of beef-flavored and shrimp-flavored ramen 12 34 56 A Joint costs (costs of noodles, spices, and other inputs and processing to splitoff point (Beginning inventory (tons (Production (tons 7 (Sales (tons 8 Selling price per ton B C Joint Costs $240,000 Beef Shrimp Ramen Ramen 0 0 $10,000 $20,00 0 $10,000 $20,00 0 $10 $15 Due to the popularity of its microwavable products, Instant decides to add a new line of products that targets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. The following is the monthly data for all the products A 22 11 12 Joint costs (costs of noodles, spices, and other B C D Joint Costs Special B E Special S $240,000 (inputs and processing to splitoff point 13 Separable costs of processing 10.000 tons of Beef Ramen into 12,000 tons of Special B 14 Separable cost of processing 20,000 tons of Shrimp Ramen into 24.000 tons of $48,000 $168,000 Special S 15 16 Beef Ramen Shrimp Ramen Special B Special $ 17 Beginning inventory (tons 0 0 0 0 18 (Production (tons $10,000 $20,000 $12,000 $24,000 19 Transfer for further processing (tons $10,000 $20,000 20 (Sales (tons $12,000 $24,000 21 Selling price per ton $10 $15 $18 $25 1. Calculate Instant's gross-margin percentage for Special B and Special S when joint costs are allocated using the following: a. Sales value at splitoff method b. Physical-measure method c. Net realizable value method 2. Recently, Instant discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 4,000 tons of stock are produced and can be sold by incurring marketing costs of $10,800. Sherrie Dong, a management accountant, points out that treating the stock as a joint product and using the sales value at splitoff method, the stock product would lose about $2,228 each month, so it should not be sold. How did Dong arrive at that final number, and what do you think of her analysis? Should Instant sell the ?stock