Firm X has a production process that has a total joint cost of $15,000.At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2.What is the cost per pound of Product 1 using the physical measure method?
A)$2.50.
B)$3.00.
C)$3.50.
D)$4.00.

Question

Quizplus · Accepted Answer

Using the physical measure method, the joint cost is allocated based on the relative weight or volume of each product at the split-off point. The total weight at the split-off point is 5,000 pounds (2,000 + 3,000), so the cost per pound is $15,000 divided by 5,000 pounds, which is $3.00 per pound of each product. Therefore, the cost per pound of Product 1 is also $3.00 per pound.

Firm X Has a Production Process That Has a Total