Bubble Corporation manufactures two products, I and II, from a joint process. A single production costs $4,000 and results in 100 units of I and 400 units of II. To be ready for sale, both products must be processed further, incurring separable costs of $1 per unit for I and $2 per unit for II. The market price for Product I is $20 and for Product II is $15.
Required:
- Allocate joint production costs to each product using the physical units method.
- Allocate joint production costs to each product using the net realizable value method.
- Allocate joint production costs to each product using the constant gross margin percentage method.