Question
A company spent $10,000 to produce the following products in a joint process: 2,000 pounds of Product A and 5,000 pounds of Product B. Neither
A company spent $10,000 to produce the following products in a joint process: 2,000 pounds of Product A and 5,000 pounds of Product B. Neither product can be sold at split off and both must be processed further before they can be sold. The additional cost of processing product A is $5 per pound. The additional cost of processing product B is $8 per pound. After further processing, Product A can be sold for $30 per pound and product B can be sold for $48 per pound. The company allocates joint cost using the hypothetical sales value at split off method. How much of the $10,000 joint cost is allocated to Product A?
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