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Allocating Joint Costs Using the Constant Gross Mergin Method A company manufactures three products, L-Ten, Trol, and Poze, from a joint process. Each production run costs $12,900. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows: Further Processing Cost per Gallon Eventual Market Price per Gallon Product Gallons L-Ten $0.50 $2.00 3,500 4,000 Trial 1.00 5.00 Pioze 2,500 1.50 6.00 Required 1. Calculate the total revenue, total costs, and total gross profit the company will eam on the sale of L-Ten, Triol, and Pioze. Total Revenue $ 42,000 Total Costs $ 22,400 Total Gross Profit $ 19,600 2. Allocate the joint cost to L-Ten, Trial, and Pioze using the constant gross margin percentage method. Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar. Joint Cost Product Allocation L-Ten s 1,983 Trial 6,666 Pioze 4,250 X Total (Note: The joint cost allocation does not equal $12,son due to rounding.) 3. What if it cost $2 to process each gallon of Triol beyond the split-aff point? How would that affect the allocation of Joint cost to these three products? Round the gross margin percentage to four decimal places and round all other computations to the nearest dollar. Joint Cost Product Allocation L-Ten S 2,650 4,572 Triol Ploze 5,679 Total $ 12,901 (Note: The joint cost allocation does not equal $12,900 due to rounding.) Fusce Chuck Ny Week 1. The constant gross margin percentage method is used to avoid assuming that all profit occurs at the split-off point. It allocates joint cost to ensure that the same gross profit is applicable to all products 2. Remember that the gross margin percentage is a function of revenues