Answer the following questions using the information below:
The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 5,000 widgets; 8,750 gizmos; and 10,000 turnbols. Respective per unit selling prices at splitoff are $75, $50, and $25. Joint costs up to the splitoff point are $187,500.
-What amount of joint costs will be allocated to the Turnbols?
A) $44,118
B) $30,882
C) $77,206
D) $66,176

Question

Quizplus · Accepted Answer

Joint costs are allocated based on the relative sales value of each product at the splitoff point. The total sales value of the three products is $75 * 5,000 + $50 * 8,750 + $25 * 10,000 = $750,000. The sales value of the turnbols is $25 * 10,000 = $250,000. Therefore, the proportion of joint costs allocated to the turnbols is $250,000/$750,000 = 1/3. The amount of joint costs allocated to the turnbols is therefore $187,500 * 1/3 = $62,500.

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