Atkinson, Inc $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 106

Multiple Choice

Atkinson, Inc., manufactures products A, B, and C from a common process. Joint costs were $60,000. Additional information is as follows:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { If Processed Further }$
$\begin{array}{cr}&\text { Units } & \text { Sales Value at Split- } & &\text { Additional }\\\text { Product } & \text { Produced } & \text { Off } & \text { Sales Value } & \text { Costs } \\\text { A } & 6,000 &40,000 & 55,000 & \$ 4,000 \\\text { B } & 4,000 &35,000& 45,000 & 6,000\\\text { C } & 2,000 &25.000 & 30.000 &8,000\\& 12,000&\$ 100,000&\$ 130,000&\$ 18,000\end{array}$
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Assuming that joint production costs are allocated using the physical quantities method (units produced) , what were the costs allocated to Product A?

• A) $27,000.
• B) $29,000.
• C) $33,000.
• D) $30,000.

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Definitions:

Peak Times

Periods of high demand or activity within a market or service sector, often leading to higher prices or increased waiting times.

Electric Company

A utility company that generates, transmits, and distributes electricity to consumers and businesses.

Tragedy of the Commons

A situation in which individual users of a shared resource act in their own interest, depleting or degrading the common resource.

Negative Externality

A cost suffered by a third party as a consequence of an economic transaction in which they were not involved.