Balley, Inc. produces three milk products (all are main products) from a joint process costing $200,000. Data from the current period's operation follow: Units Unit Sales Price Separable Total Revenue After
Produced at Split-Off Costs Further Processing
Regular 5,000 $5 $10,000 $ 40,000
Fat-free 15,000 7 16,000 120,000
2% 30,000 8 5,000 250,000
If Balley allocates joint costs using the physical output method instead of the net realizable value method, income will be:
A) higher
B) lower
C) unchanged
D) unable to determine from data given
Correct Answer:
Verified
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