B. To start, we need to say that this is a difficult question. It is made difficult first by the fact that the company will not process Product R further, even though we would expect it to. This is because the costs to process further ($150,000) are greater than the incremental revenue that would be gained by processing it further ($125,000; $50 increase in sales price per unit × 2,500 units). Therefore, Product R will not be processed further and its net realizable value (NRV) is $250,000. (NRV is calculated as sales price minus the costs to complete and dispose. Since Product R is not going to be processed further, its NRV is equal to its sales price at split off: $100 per unit.) The NRV of Product S is $425,000 ($115 selling price × 5,000 units produced this period - $150,000 in incremental costs). This means that the total NRV of the 2 joint products is $675,000, of which Product R is 37.037%. Product T is a by-product so the NRV of Product T will be a reduction of the joint costs to be allocated. The NRV of T is $125,000 ($30 per unit price × 7,500 units produced - $100,000 in incremental costs). This reduced the joint costs from $720,000 to $595,000. Of this new joint cost number, 37%, or $220,370, is allocated to Product R.

C. This is the allocable joint costs after the reduction to joint costs for the net realizable value of the by-product.

D. This answer includes additional processing costs.