Joint Products a and B Emerge from Common Processing That

question 115

Multiple Choice

Joint products A and B emerge from common processing that costs $200,000 and yields 2,000 units of Product A and 1,000 units of Product B.Product A can be sold for $100 per unit.Product B can be sold for $120 per unit.How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? (Do not round intermediate calculations.)

• A) $75,000
• B) $125,000
• C) $100,000
• D) $133,333

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Definitions:

Prices

The cash amount one needs to spend to obtain a good, service, or asset.

Marginal Cost

The uptick in cumulative expenses that comes from producing an additional unit of a product or service.

Total Revenue

The total receipts from sales of a given quantity of goods or services.

Marginal Revenue

The supplementary financial gain obtained through the sale of one more unit of a good or service.