Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,500 gallons of product B to the split-off point costs $6,700. The sales value at split-off is $2.90 per gallon for product A and $29.00 per gallon for product B. Product B requires additional separable processing beyond the split-off point at a cost of $2.70 per gallon before it can be sold at a price of $34 per gallon. Required: What is the company's cost to produce 1,500 gallons of product B? Product cost
Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,500 gallons of product B to the split-off point costs $6,700. The sales value at split-off is $2.90 per gallon for product A and $29.00 per gallon for product B. Product B requires additional separable processing beyond the split-off point at a cost of $2.70 per gallon before it can be sold at a price of $34 per gallon. Required: What is the company's cost to produce 1,500 gallons of product B? Product cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishnu
![Exercise 7-32 (Algo) Joint Products [LO 7-6]
Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at
split-off. Processing 5,000 gallons of product A and 1,500 gallons of product B to the split-off point costs $6,700. The sales value at
split-off is $2.90 per gallon for product A and $29.00 per gallon for product B. Product B requires additional separable processing
beyond the split-off point at a cost of $2.70 per gallon before it can be sold at a price of $34 per gallon.
Required:
What is the company's cost to produce 1,500 gallons of product B?
Product cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbb8a8c95-5c53-4513-8607-97a32c525ac3%2Fc6f28369-f846-4e62-94f0-829ce1fa3859%2F7sj7wqm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 7-32 (Algo) Joint Products [LO 7-6]
Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at
split-off. Processing 5,000 gallons of product A and 1,500 gallons of product B to the split-off point costs $6,700. The sales value at
split-off is $2.90 per gallon for product A and $29.00 per gallon for product B. Product B requires additional separable processing
beyond the split-off point at a cost of $2.70 per gallon before it can be sold at a price of $34 per gallon.
Required:
What is the company's cost to produce 1,500 gallons of product B?
Product cost
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