The Mallak Company Produced Three Joint Products at a Joint

question 23

Multiple Choice

The Mallak Company produced three joint products at a joint cost of $100,000.Two of these products were processed further.Production and sales were:
$$\begin{array} { | l | c | r | r | } \hline & \text { Veight } & \text { Sales } & \text { Adit. Processing Costs } \\\hline \mathrm { P } & 300,000 \mathrm { ks } . & \$ 245,000 & \$ 200,000 \\\hline \mathrm { Q } & 100,000 \mathrm { ks } . & 30,000 & - 0 \\\hline \mathrm { R } & 100,000 \mathrm { ks } . & 175,000 & 100,000 \\\hline\end{array}$$ What is the net income of Mallak Company if the estimated net realizable value method of joint cost allocation is used?

• A) $20,000.
• B) $50,000.
• C) $150,000.
• D) $350,000.

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Definitions:

Marginal Cost

The change in total cost that arises when the quantity produced is increased by one unit.

Perfectly Competitive

A market structure where many firms sell identical products, entry and exit are easy, and no single seller can influence the market price.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service.

Total Revenue

The total amount of income generated by the sale of goods or services before any expenses are subtracted.