Allocating Joint Costs Using the Sales$-$Value$-$at$-$Split$-$Off 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 $20,000$ pounds of peaches is as follows: Assume that Sunny Lane, Inc., uses the sales$-$value$-$at$-$split$-$off method of joint cost allocation and has provided the following information about the four grades of peaches:

$\backslash$table$[[$Grades$,$Pounds,Price at Split$-$Off $($per lb$.)],[$Grade A$,1,500,$$$6\mathrm{.}00$