Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, fr
ID: 2493619 • Letter: A
Question
Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from the same process, which last year, cost $240,000. Anderson produced 20,000 gallons of Gorp, which sells for $60 per gallon and 60,000 gallons of Gumm, which sells for $30 per gallon. After the split-off point, Gorp required additional processing costing $300,000 to make it salable. Using the adjusted sales method, how much of the joint cost should be allocated to Gorp? Note: in calculating your answer, round the % of sales value two places past the decimal (example 16.66%). Your final answer will be close to one of the four answers below, but will not be exact.
Explanation / Answer
Ans;
$300,000