Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from

the same process, which last year, cost $480,000. Anderson produced 20,000 pounds of Gorp,

which sells for $60 per gallon and 60,000 gallons of Gumm, which sells for $30 per

gallon. After the split-off point, Gorp required additional processing costing $300,000 to make

it salable. Using the adjusted sales method (net realizable value method), how much of the joint

cost should be allocated to Gumm?

a.

$120,000

b.

$320,000

c.

$160,000

d.

$192,000