Joint products A and B emerge from common processing that costs $150,000 and yields 8,000 units of Product A and 4,000 units of Product B.Product A can be sold for $100 per unit.Product B can be sold for $80 per unit.What amount of the joint costs will be assigned to Product B if joint costs are allocated on the basis of number of units produced? (Do not round your intermediate calculations. )
A) $42,857
B) $66,667
C) $50,000
D) $100,000

Question

Quizplus · Accepted Answer

Allocation rate = Total cost to be allocated ÷ Cost driver (allocation base)
Allocation rate = $150,000 in joint costs ÷ (8,000 units + 4,000 units)= $12.50 per unit
Allocation per cost object = Allocation rate x Weight of the cost driver for that cost object
Allocation of joint costs to x = $12.50 per unit x 4,000 units = $50,000

Joint Products a and B Emerge from Common Processing That