Use the following information to answer the following Questions
Kingston 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. Kingston 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

-The joint cost allocated to Q under the relative-sales-value method would be:
A) $40,000.
B) $62,400.
C) $64,000.
D) $65,600.
E) None of the answers is correct.

Question

Use the following information to answer the following Questions
Kingston 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. Kingston 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

-The joint cost allocated to Q under the relative-sales-value method would be:
A) $40,000. 
B) $62,400. 
C) $64,000. 
D) $65,600. 
E) None of the answers is correct.

Quizplus · Accepted Answer

The relative-sales-value method allocates joint costs based on the proportion of each product's sales value to the total sales value. The correct allocation to Q is $62,400.

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