The Scottso Corporation produces two consumer products and a by-product. Zylon is ready for sale after split-off, while Qytol must be further processed. The by-product is a heavy residue in the bottom of the vat. The net realizable value of the by-product is credited against the $565,000 joint cost of the Heating Department. Volume and cost data for February is as follows:AdditionalProcessing0$40,0000Required:a. Allocate the Heating Department cost to the products using the physical quantities method.b. Allocate the Heating Department cost to the products using the workback method.Which of the following is a weakness of the step method of service cost allocations?a. computations are more complex than the reciprocal methodb. all interdepartmental services are ignoredc. all intradepartmental services are ignoredd. the order of service department allocation has to be determinedJoint produces and byproducts are produced simultaneously by a single process or series of processes anda. joint products are salable at the split-off point, but byproducts are notb. byproducts are salable at the split-off point, but joint products are notc. the revenue from byproducts may be recognized at the time of productiond. all byproducts must be allocated some portion of joint costs
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