The Moody Company produced three joint products at a joint cost of $100,000.Two of these products were processed further.Production and sales were: If joint costs are allocated based on relative weight of the outputs and all products are main products,how much of the joint costs would be allocated to product P?
A)$43,750.
B)$50,000.
C)$60,000.
D)$62,500.

Question

The Moody Company produced three joint products at a joint cost of $100,000.Two of these products were processed further.Production and sales were:  If joint costs are allocated based on relative weight of the outputs and all products are main products,how much of the joint costs would be allocated to product P?
A)$43,750. 
B)$50,000. 
C)$60,000. 
D)$62,500.

Quizplus · Accepted Answer

We need to allocate the joint cost to the three products based on their relative weight of output. 
Total weight of output = 5,000 + 2,000 + 1,000 = 8,000 
Relative weight of output for P = 5,000/8,000 = 0.625 
Joint cost allocated to P = 0.625 x $100,000 = $62,500 
Therefore, the answer is (D) $62,500.

The Moody Company Produced Three Joint Products at a Joint