Recyclers, Inc

question 90

Multiple Choice

Recyclers, Inc. reprocesses paper and obtains 2 main products: a by-product and a waste. By-product revenues are treated as a reduction in joint costs. During the period 1,000 tons were processed at a cost of $12,000 for materials and processing, resulting in the following: Sales Value Separable Sales Value After
Product Tons at Split-Off Costs Further Processing
Main-1 200 $4,000 $2,000 $10,000
Main-2 400 5,000 6,000 12,000
By-product 300 2,000 -0- 2,000
Waste 100 -0- -0- -0-
If the firm allocates joint costs to the main products using the physical output method, how much will be allocated to Main-1?

• A)$2,000
• B)$2,400
• C)$2,222
• D)$3,333

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