Star Maple syrup , located in Toronto , process maple sap into maple syrup , maple sugar and maple butter . The company has one manager for each of the three main products. The managers receive bonuses based on the profitability of their individual of their individual products. Lately they have been concerned about the impact of the allocations of joint costs on the profitability of each of the product lines. They approached the Director who explained that several different allocation methods could be used and that the gross margin of each product would change with each method. Director agreed that he would get the accountant (you ) to provide the managers with information about product profitability using each of the acceptable joint product allocation methods.

First , you gathered data for the current period. During the spring 2018 the joint costs of processing maple sap were $2,000,000. The company had no beginning or ending inventories for the season.

Production and sales information for the season were as follows:

Product Cases Sales Value at Split Off Separable Costs Selling Price Maple Syrup 70,000 $24 per case $12 per case $56.00 per case Maple Syrup 22,000 $26 per case $16 per case $46.00 per case Maple Syrup 8,000 $31 per case $14 per case $46.50 per case