<p>Joint Costs and Additional Processing. Good Earh Products produces orange juice and candied orange peels. A 1,000lb batch of oranges, costing $400, is transformed using labor of $40 into 100lbs of orange peels and 300 pints of juice. The company had determined that the sales value of 100lbs of peels at the split-off pint is $300 and the value of a pint of juice (not pasteurized or bottled) is $.30. Beyond the split-off point, the cost of sugar-coating and packaging the 100lbs of peels is $50. The cost of pasteurizing and packaging the 300 pints of juice is $150. A 100 pound box of candied peels is sold to commercial baking companies for $500. Each pint of juice is sold for $1. </p><p>A. Allocate joint cost using the relatives sales values a the split-off point and calculate the profit per 100 pound box of sugar coated peels and the profit per pint of juice. </p><p>B. What is the incremental cost to the company of sugar coating rather selling them in there condition at the split-off point? Show Math</p><p> a. Allocation based on relative sales values at the split-off point:</p><p>Sales value of 100 pounds of orange peels $300 Sales value of 300 pints of juice (300  $.30) 90 Total $390</p><p>Joint cost ($400 + $40) $440</p><p>Allocation to peels ($300 ÷ $390)  $440 $338</p><p>Allocation to juice ($90 ÷ $390)  $440 102 Total $440</p><p>Profit per 100-pound box of candied peels: Selling price $500 Less joint cost 338 Less cost of sugar coating and packaging 50 Profit $112</p><p>Profit per pint of juice: Selling price $1.00 Less joint cost per pint ($102 ÷ 300) .34 Less cost of pasteurizing and packaging ($150 ÷ 300) .50 Profit $0 .16 b. Incremental revenue of sugar coating: ($500 − $300) $200 Incremental cost 50 Net incremental benefit of sugar coating $150 c. Incremental revenue of packaged juice ($300 − $90) $210 Incremental cost 150 Net incremental benefit of pasteurizing and packaging $ 60 ÷ 300 = $.20/pint</p>