Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer, the

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Question:

Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer were as follows:

Product	Cases	Additional Costs	Selling Price
Ketchup	100,000.00	$3.00	$28
Juice	150,000.00	$5.00	$25
Canned	200,000.00	$2.50	$10

a. Determine the amount allocated to each product if the estimated net realizable value method is used.

b. Determine the amount allocated to each product if the physical units method is used.

(NOTE: The answer key is provided below. I just need explanations provided for each number.)

A. Net Realizable Method
Amount allocated to
Ketchup	$228,571.43
Juice	$274,285.71
Canned	$137,142.86

B. Physical Units Method
Amount allocated to
Ketchup	$142,222.22
Juice	$213,333.33
Canned	$284,444.44