Differential Chemical produced 12,000 gallons of Preon and 32,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,000. At the split-off point, Preon has a market value of $8 per gallon and Paron $2 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used. A. $1,400 B. $4,200 C. $2,800 D. $1,750 E. $4,675
Differential Chemical produced 12,000 gallons of Preon and 32,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,000. At the split-off point, Preon has a market value of $8 per gallon and Paron $2 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used. A. $1,400 B. $4,200 C. $2,800 D. $1,750 E. $4,675
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Differential Chemical produced 12,000 gallons of Preon and
32,000 gallons of Paron. Joint costs incurred in producing
the two products totaled $7,000. At the split-off point, Preon
has a market value of $8 per gallon and Paron $2 per gallon.
Compute the portion of the joint costs to be allocated to Preon
if the value basis is used.
A. $1,400
B. $4,200
C. $2,800
D. $1,750
E. $4,675
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