Bevo Beef Company Uses the Relative Market Value Method of Allocating

question 107

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:
$\begin{array}{lrr}\text { Product } & \begin{array}{c}\text { Production in } \\\text { Pounds }\end{array} & \begin{array}{c}\text { Market } \\\text { Price/lb. }\end{array}\\\hline\text { Sirloin } & 3,000 & \$ 5.00 \\\text { Hamburger } & 10,000 & 2.00 \\\text { Rib eye } & 4,000 & 4.75 \\\text { Roast } & 6,000 & 3.50\end{array}$
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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