Joint products A and B emerge from common processing that co

Joint products A and B emerge from common processing that costs $102,000 and yields 2,600 units of Product A and 1,400 units of Product B. Product A can be sold for $140 per unit. Product B can be sold for $130 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values? (Do not round your intermediate calculations.)

Solution

Joint costs for A and B =102000

                               A                             B                    Total

No of units          2600                       1400                     4000

Selling price         140                          130

Sales                  364000                   182000                546000

Sales ratio = 364000:182000

= 2:1

Hence joint cost assigned to A = 2/3 (102000) = 68000

JOing cost assigned to B =1/3(102000)           = 34000