Fantasy Manufacturing Produces Three Products in a Joint Operation Required:
(A)Allocate the Joint Costs Using the Relative Sales Value

Essay

Fantasy Manufacturing produces three products in a joint operation.Information regarding the products appears below: $$\begin{array} { | l | r | r | r | r | } \hline & \text { Item1 } & \text { Item2 } & \text { Item 3 } & \text { Total } \\\hline \text { Units Proouced } & 20,000 & 25,000 & 10,000 & 55,000 \\\hline \begin{array} { l } \text { Sales Value at } \\\text { Split-off }\end{array} & \$ 150,000 & \$ 50,000 & \$ 20,000 & \$ 220,000 \\\hline \begin{array} { l } \text { Additional costs if } \\\text { Processed further }\end{array} & \$ 10,000 & \$ 30,000 & \$ 5,000 & \$ 45,000 \\\hline \begin{array} { l } \text { Sales Value if } \\\text { Processed Further }\end{array} & \$ 170,000 & \$ 90,000 & \$ 28,000 & \$ 288,000 \\\hline \text { Joint Costs } & & & & \$ 100,000 \\\hline\end{array}$$
Required:
(a)Allocate the joint costs using the relative sales value at split-off method.(b)Allocate the joint costs using the constant gross margin percentage method.