Problem -Joint Process
In a joint process The Batali Company produces four sauces Basic Cream, Heavy Cream, Lite Cream, and Ultra Fancy. Ultra Fancy cannot be sold at the split off point so it has to be processed further. Basic Cream does not have an option to be processed further.The remaining products may be sold at its split-off point or processed further. Joint processing costs for a single batch of the joint products are $188,000. Other relevant data are as follows:
Product	Liters Produced	Total Sales Value At Split-Off	Additional Processing Costs	Total Sales Value of Final Product
Basic Cream	28,000	$53,700	$0	$53,700
Heavy Cream	25,000	32,700	9,000	43,368
Lite Cream	45,000	81,624	14,300	91,230
Ultra Fancy	22,000	0	9,870	54,978
Total	120,000	168,024	33,170	243,276
REQUIRED
1. Determine which products should be processed further.
2. If it is determined to not process a product further, it will be sold at the split off point (see your answer to part 1). Allocate the joint cost to the four primary products using the approximated net realizable value method (round to whole dollars).
3. If all liters of each of the four sauces are sold (either at the split off point or processed further as you determined in part 1) what is the gross profit of each product?