Use the Following Information to Answer the Following Questions

question 46

Multiple Choice

Use the following information to answer the following Questions
Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost = $80,000) . Five thousand pounds of Nuts can be sold at split-off for $20 per pound; ten thousand pounds of Bolts can be sold at split-off for $15 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method.
-The amount of joint cost allocated to Bolts would be:

• A) $32,000.
• B) $40,000.
• C) $48,000.
• D) $60,000.
• E) $80,000.

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Definitions:

Overallocated

The condition of having allocated or committed more resources to a project, task, or item than is available or necessary.

Least-Cost

A method or strategy that involves choosing the option that minimizes the total costs of achieving a particular objective.

Pure Competition

A market structure characterized by a large number of small firms, free entry and exit, and a product that is considered perfectly homogeneous, leading to firms being price takers.

Average Total Cost

The total cost of production divided by the quantity produced, representing the per unit cost of production.