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59. Which of the following is not a basic approach to allocating
costs for costing inventory in joint-cost situations?
60. Kode Co. manufactures a major product that gives rise to a by-
product called May. May's only separable cost is a $1 selling cost
when a unit is sold for $4. Kode accounts for May's sales by
deducting the $3 net amount from the cost of goods sold of the
major product. There are no inventories. If Kode were to change its
method of accounting for May from a by-product to a joint product,
what would be the effect on Kode's overall gross margin?
61. Mighty, Inc. processes chickens for distribution to major
grocery chains. The two major products resulting from the
production process are white breast meat and legs. Joint costs of
$600,000 are incurred during standard production runs each
month, which produce a total of 100,000 pounds of white breast
meat and 50,000 pounds of legs. Each pound of white breast meat
sells for $2 and each pound of legs sells for $1. If there are no
further processing costs incurred after the split-off point, what
amount of the joint costs would be allocated t