BK Chemicals produces two industrial chemical compounds, L35 and M50, from the same process, which last year, cost $400,000. BK produced 15,000 gallons of L35, which sells for $50 per gallon, and 30,000 gallons of M50, which sells for $30 per gallon. Using the relative sales value method, how much of the joint cost should be allocated to L35?

BK Chemicals produces two industrial chemical compounds, L35 and M50, from the same process, which last year, cost $400,000. BK produced 15,000 gallons of L35, which sells for $50 per gallon, and 30,000 gallons of M50, which sells for $30 per gallon. Using the relative sales value method, how much of the joint cost should be allocated to L35?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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