Industrial Solutions Company
Industrial Solutions Company produces three products from the same process that has joint processing costs of $4,100.Products R,S,and T are produced in the following quantities: 250 gallons,400 gallons,and 750 gallons.Industrial Solutions Company also incurred advertising costs of $60,000.The ad was used to run sales for all three products.The three products occupy floor space in the following ratio: 5:4:9.(Round all answers to the nearest dollar. )
Refer to Industrial Solutions Company.Assume that Industrial Solutions chooses to allocate its advertising cost among the three products.What amount of advertising cost is allocated to Product S using the floor space ratio?

Question

Quizplus · Accepted Answer

To allocate the advertising cost to Product S using the floor space ratio, we need to first calculate the total ratio of floor space occupied by all three products:

5 + 4 + 9 = 18

Next, we can calculate the proportion of floor space occupied by Product S:

4/18 = 0.2222

This means that Product S occupies 22.22% of the total floor space.

To allocate the advertising cost to Product S, we can multiply the total advertising cost by the proportion of floor space occupied by Product S:

$60,000 x 0.2222 = $13,332.80

Rounding to the nearest dollar, the answer is $13,333. Therefore, the best choice is C.

Industrial Solutions Company Industrial Solutions Company Produces Three Products from the Same Process