Ted Brown is the chief financial officer of Haywood Inc., a large manufacturer of cosmetics and other personal care products. Ted is conducting a financial analysis of the firm's line of hand lotions which consists of three products: SkinSalve, SkinCream, and SkinBalm. Total sales for the three products in the recent year were $400,000, $250,000 and $500,000, respectively. Because there is a small amount of additional processing cost for each of the three products, which differs between the products ($20,000, $50,000 and $30,000, respectively), Ted has been using the net realizable value method for allocating the joint production cost of $500,000. However, he is not satisfied with the result of somewhat different gross margin percentage ratios (gross margin/sales) for the three products when using this approach. He knows only of the physical units method, the sales value at split-off method, and the net realizable value method for allocating joint cost.

Data for Analysis:
	SkinSalve	SkinCream	SkinBalm	Total
Gross Sales	$400,000	$250,000	$500,000
Less Separable Cost	$20,000	$50,000	$30,000
Less: Joint Cost				$500,000

Required

Devise a new method of cost allocation for Ted so that after allocation of joint costs and separable costs, the gross margin percentage is the same for all three products.