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Garage Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $90,000 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 $90,000 in the production of 20,000 gallons of P and 50,000 gallons of Q. Garage can sell P and Q at split-off for $2.00 per gallon and $2.20 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows:
P | Q | |
Separable processing costs | $22,000 | $42,000 |
Sales price (per gallon) if processed beyond split-off | $4 | $6 |
The joint cost allocated to P under the relative-sales-value method would be: (Do not round your intermediate calculations.)
$24,000.
$19,347.
$30,938.
$28,000.
None of these.
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