A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced. How much of the $120,000 cost should be allocated to feed if the value basis is used?
A) $12,250.
B) $42,000.
C) $45,000.
D) $70,000.
E) $100,000.

Question

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced.  How much of the $120,000 cost should be allocated to feed if the value basis is used?
A) $12,250. 
B) $42,000. 
C) $45,000. 
D) $70,000. 
E) $100,000.

Quizplus · Accepted Answer

11eaadfd_cca5_a3f0_95d8_c186ee142e92_TB6948_00 Feed: $70,000/$200,000 = 35%
35% × $120,000 = $42,000

A Granary Allocates the Cost of Unprocessed Wheat to the Production