Bevo Beef Company Uses the Relative Market Value Method of Allocating

question 17

Multiple Choice

Bevo Beef Company uses the relative market value method of allocating joint costs in their production of beef products.Relevant information for the current period follows: $\begin{array}{lrr}&\text { Production in } & \text { Market } \\\underline {\text { Product } }& \underline {\text { Pounds }}&\underline {\text { Price/Pound }}\\\text { Sirloin } & 3,000 & \$ 5.00 \\\text { Hamburger } & 10,000 & 2.00 \\\text { Rib eye } & 4,000 & 4.75 \\\text { Roast } & 6,000 & 3.50\end{array}$ The total joint cost for the current period was $43,000.How much of this cost should Bevo Beef allocate to sirloin?

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

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Definitions:

Journal Entries

The method of recording financial transactions where each transaction is noted in two accounts in the ledger to maintain the accounting equation's balance.

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement, to ensure accuracy and completeness of the records.

Erroneously Charged

Incorrectly or mistakenly billed for goods or services, leading to inaccurate financial transactions.

Bank Statement Balance

The ending cash balance as recorded in the bank's records at the end of a reporting period.