The SYT Corporation produces two consumer products and a by-product. Zylon is ready for sale after split-off, while Qytol must be further processed. The by-product is a heavy residue in the bottom of the vat. The net realizable value of the by-product is credited against the $565,000 joint cost of the Heating Department. Volume and cost data for February is as follows:
- Gallons Selling Additional
- Produced Price Processing
- Zylon 200,000 $2.00 0
- Qytol 400,000 1.10 $40,000
- By-Product 5,000 0.50 0
Required:
a. Allocate the Heating Department cost to the products using the physical quantities method.
b. Allocate the Heating Department cost to the products using the workback method.