Good earth Products produces orange juice and candied orange peels. A 1,000 pound batch of oranges costing $400, is transformed using labor of $40 into 100 pounds of orange peels and 300 pints of juice. The company has determined that the sales value of 100 pounds of peels at the split-off point is $300 and the value of a pint of juice (not pasteurized or bottled) is 0.30. Beyond the split off point, the cost of sugar coating and packaging the 100 pounds 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.
a. Allocate joint costs using the relative sales values at the split-off point and calculate the profit per 100 pound box of sugar-coated peels and the profit per pint of juice.