Wren Pork Company uses the value basis of allocating joint costs in its production of pork products. Relevant information for the current period follows: $$\begin{array} { l r r }
\text { Product } & \text{ Pounds } & \text { Price/lb } \
\text { Loin chops } & { 3 , 0 0 0 } & \$ 5.00 \
\text { Ground } & 10,000 & 2.00 \
\text { Ribs } & 4,000 & 4.75 \
\text { Bacon } & 6,000 & 3.50
\end{array}$$ The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?
A) $0.
B) $5,909.
C) $8,600.
D) $10,750.
E) $43,000.

Question

Wren Pork Company uses the value basis of allocating joint costs in its production of pork products. Relevant information for the current period follows: $$\begin{array} { l r r } 
\text { Product } &  \text{ Pounds } & \text { Price/lb } \
\text { Loin chops } & { 3 , 0 0 0 } & \$ 5.00 \
\text { Ground } & 10,000 & 2.00 \
\text { Ribs } & 4,000 & 4.75 \
\text { Bacon } & 6,000 & 3.50
\end{array}$$ The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?
A) $0.
B) $5,909.
C) $8,600.
D) $10,750.
E) $43,000.

Quizplus · Accepted Answer

Since Wren Pork Company uses the value basis of allocating joint costs and the loin chops have the lowest sales value, they should not be assigned any joint costs. Therefore, the answer is $0.

Wren Pork Company Uses the Value Basis of Allocating Joint