Rain, Inc., is a large food-processing company. It processes 160,000 pounds of peanuts in the peanuts department at a cost of $472,400 to yield 44,000 pounds of product A, 90,000 pounds of product B, and 14,000pounds of product C.

The company wants to make a gross margin of 10% of revenues on product C and needs to allow 20% of revenues for marketing costs on product C. An overview of operations follows:

$472,400		44,000 pounds 14,000 pounds	$36,000 Salting DepartmentProcessing		44,000 $9/lb Salted Peanutspounds
of 160,000 lb ProcessingPeanuts Department					90,000 $6/lb Raw Peanutspounds
			$11,000 ProcessingPaste Department		14,000 $8/lb Peanut Butterpounds
Splitoff Point ^

1.	Compute unit costs per pound for products A, B, and C, treating C as a byproduct. Use the NRV method for allocating joint costs. Deduct the NRV of the byproduct produced from the joint cost of products A and B.
2.	Compute unit costs per pound for products A, B, and C, treating all three as joint products and allocating joint costs by the NRV method.

More Info Product A is processed further in the salting department at a cost of $36,000. It yields 44,000 pounds of salted peanuts, which are sold for $9 per pound. Product B (raw peanuts) is sold without further processing at $6 per pound. Product C is considered a byproduct and is processed further in the paste department at a cost of $11,000. It yields 14,000 pounds of peanut butter, which are sold for $8 per pound