Raymer Corporation produced 3,660 units,consisting of three separate products,in a joint process for the year.The market for these products was so unstable that it was not practical to estimate the selling price of the products.A cost of $425,000 was incurred in the joint process.Product X's production was 80% of product Y's while product Z's production was 125% of product Y's.What is the amount of the joint cost allocable to product X assuming Raymer uses the physical quantities method of allocation?
A)$111,475.
B)$114,865.
C)$139,344.
D)$141,667.

Question

Quizplus · Accepted Answer

Product X's production was 80% of product Y's, so the ratio of X to Y is 80:100, or 4:5. Product Z's production was 125% of product Y's, so the ratio of Z to Y is 125:100, or 5:4. The total ratio of X:Y:Z is therefore 4:5:5. The joint cost allocable to product X is therefore $425,000 * 4/14 = $111,475.

Raymer Corporation Produced 3,660 Units,consisting of Three Separate Products,in a Joint