Corker Company manufactures three products from a joint process.Joint costs for the year amounted to $250,000.The following data are also available: $\begin{array}{l}
&&\text { Sales Value at }\
\text { Product } & \text { Units Produced } & \text { Split-off } \
\mathrm{X} & 5,000 & \$ 70,000 \
\mathrm{Y} & 3,000 & \$ 30,000 \
\mathrm{Z} & 2,000 & \$ 100,000
\end{array}$ Assuming the relative-sales-value method of allocating joint costs, the amount of joint costs allocated to product X would be _____.
A)$87,500
B)$250,000
C)$70,000
D)$125,000

Question

Quizplus · Accepted Answer

The relative-sales-value method allocates joint costs based on the proportion of each product's sales value at the split-off point. The total sales value at split-off is $70,000 (X) + $30,000 (Y) + $100,000 (Z) = $200,000. Product X's share of the total sales value is $70,000 / $200,000 = 35%. Therefore, Product X's allocated joint costs are 35% of $250,000 = $87,500.

Corker Company Manufactures Three Products from a Joint Process Assuming the Relative-Sales-Value Method of Allocating Joint Costs, the Amount