Please do not copy from Chegg. I need to understand the concept. Please explain the answer.

Breakfast time Cereal Company has an opportunity to process its Crummies further into a mulch for ornamental shrubs. The additional processing operation costs $.50 per kilogram and the mulch will sell for $3.50 per kilogram.

Joint Cost	Cereal	Quantity at Split-Off Point	Sales Price per Kilogram
$30,000	Yummies	12,000 kilograms	$2
	Crummies	8,000 kilograms	2.50

Please do not copy from Chegg. I need to understand the concept. Please explain the answer.

Required:

1. Should Breakfast time's management decide to process Crummies into the mulch? Why?

2. Suppose the company does process Crummies into the mulch. Use the net-realizable-value method to allocate the joint production cost between the mulch and the Yummies.