Question
Garage Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $80,000 in the production of 20,000 gallons of
Garage Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $80,000 in the production of 20,000 gallons of P and 60,000 gallons of Q. Garage can sell P and Q at split-off for $2.20 per gallon and $2.60 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows: P Q Separable processing costs $15,000 $35,000 Sales price (per gallon) if processed beyond split-off $3 $4 The joint cost allocated to Q under the relative-sales-value method would be: $40,000. $62,400. $64,000. $65,600. some other amount.
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