Sparrow Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Sparrow Company plans to produce 40,000 pounds of C and 20,000 pounds of U from 60,000 pounds of ore. C sells for $30 per pound and U sells for $40 per pound. Assuming the relative- sales- value method of allocating joint costs, the amount of joint cost allocated to product U would be:
A) $0
B) $685,714
C) $480,000
D) $400,000

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The Answer of Sparrow Company processes copper ore into two products, C and U. The ore costs $5 per pound and conversion costs are $15 per pound. Sparrow Company plans to produce 40,000 pounds of C and 20,000 pounds of U from 60,000 pounds of ore. C sells for $30 per pound and U sells for $40 per pound. Assuming the relative- sales- value method of allocating joint costs, the amount of joint cost allocated to product U would be:
A) $0
B) $685,714
C) $480,000
D) $400,000

Sparrow Company Processes Copper Ore into Two Products, C and U