Saskatchewan Soy Products (SSP) buys soy beans and processes them into other soy products. Each tonne of soy beans that SSP purchases for $380 can be converted for an additional $190 into 700 lbs of soy meal and 80 gallons of soy oil. A pound of soy meal can be sold at splitoff for $1.12, and soy oil can be sold in bulk for $4 per gallon. SSP can process the 700 lbs of soy meal into 750 lbs of soy cookies at an additional cost of $330. Each pound of soy cookies can be sold for $2.12 per pound. The 80 gallons of soy oil can be packaged at a cost of $220 and made into 320 quarts of Soyola. Each quart of Soyola can be sold for $1.35. Required
Allocate the joint cost to the cookies and the Soyola using:
a. Sales value at splitoff method b. NRV method