Chapter 6, Problem 12P

Otto Inc. specializes in chicken farming. Chickens are raised, packaged, and sold mostly to grocery chains. Chickens are accounted for in batches of 50,000. At the end of each growing period, the chickens are separated and sold by grades. Grades AA and A are sold to large grocery chains, and B and C are sold to other buyers. For costing purposes, Otto treats each batch of chicks as a joint product. The cost data for a batch of 50,000 chicks follow:

Total joint costs for the batch were $125,000.

Required:

Compute the cost allocations for each product, using the sales value at split-off method. (Round sales value percentages to five decimal places.)