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The Abraham Company produces three products - product A, Product B and Product C. Product A and B are the joint products. Product C
The Abraham Company produces three products - product A, Product B and Product C. Product A and B are the joint products. Product C has a relatively small market value and is therefore treated as a by-product. During March, 8,000 units of product A, 10,000 units of product B and 2,000 units of product C were processed in refining department. The joint processing cost incurred in the refining department was 204,000. Some additional data is given below: Product A Product B Product C Sales price per unit Production cost after separation $20 $25 $5 5 7 1 Marketing and admin. expenses per unit 1 1 Operating profit per unit The Abraham Company uses market value method to assign cost to product A and product B and reversal cost method to allocate cost to product C. Required: Allocate joint cost to by-product C and joint product A and B.
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