A factory producing an article A also produces a by-product B, which is further processed into finished product. The joint cost of manufacture is given as follows:
Subsequent costs are given as follows:
Estimated profits on sales are 25% for A and 290% for B. It is assumed that selling and distribution expenses are in proportion to sales prices. Show how you would apportion joint costs of manufacture and prepare a statement showing the cost of production of A and B.