Wren Pork Company Uses the Relative Market Value Method of Allocating

question 132

Multiple Choice

Wren Pork Company uses the relative market value method of allocating joint costs in its production of pork products.Relevant information for the current period follows: The total joint cost for the current period was $43,000.How much of this cost should Wren Pork allocate to Loin chops?

• A)$0.
• B)$5,909.
• C)$8,600.
• D)$10,750.
• E)$43,000.

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Definitions:

Set-Up Costs

Initial expenses incurred during the establishment of a new business or production line, including equipment and installation fees.

Storage Costs

Expenses associated with keeping goods in a warehouse or storage facility until they are sold or used.

Economic Order Quantity (EOQ)

A formula that calculates the optimal order size to minimize the total costs associated with purchasing, receiving, and holding inventory.

Carrying Cost

Carrying cost includes expenses associated with holding or storing inventory, such as insurance, storage, and opportunity costs.