Problem 1[20%] Renato Cosmetics purchases direct materials and processes them into perfume. From a certain mix of direct materials, a jointproduction process generates Luxury, a high-grade perfume, and Mystery, a medium-grade perfiume. In October, $480,000 of direct materials were processed at a cost of $720,000, resulting in 16,000 ounces of Luxury and 4,000 ouncesof Mystery. Luxury sells for $35 per ounce and Mystery sells for $60 per ounce. Management generally processes each of theseperfumes further in separable processes to manufacture more refined products. Luxury is processed separately at a cost of $18 perounce, with the resulting product, Luxury X. Mystery is processed separately at a cost of $24 per ounce, with the resulting product,MysteryX. If both Luxury and Mystery are processed into refined products, the sales value of two final products totals $2,688,000. IF Renatouses the net-realizable-value method to allocate joint production costs, the joint production cost allocated to Luxury is $750,000. Required:
【題組】1.If Renato uscs the relative-sales-value method to allocate joint production costs, compute the costs allocated to Luxury andMystery.(10%)