Allocating Joint Costs Using the Physical Units Method Sunny Lane, Inc., purchases peaches from local orchards and sorts them into four categories. Grade A are large blemish-free peaches that can be sold to gourmet fruit sellers. Grade B peaches are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores: Peaches to be sliced for canned peaches are even smaller than Grade B peaches and have blemishes. Peaches to be pureed for use in sauces are of lower grade than peaches for slices, yet still food grade for canning. Information on a recent purchase of 26,000 pounds of peaches is as follows: 1. Allocate the joint cost to the four grades of peaches using the physical units method grade. Round the average cost answer to the nearest cent. Average cost =$ per pound. 3. What if there were 2,600 pounds of Grade A peaches and 4,680 pounds of Grade B? How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades