A Granary Allocates the Cost of Unprocessed Wheat to the Production

Multiple Choice

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced. $$\begin{array} { l r c } \text { Product } & \text { Pounds } & \text { Price per Pound } \\\text { Feed } & 100,000 & \$ 0.70 \\\text { Flour } & 50,000 & 2.20 \\\text { Starch } & 20,000 & 1.00\end{array}$$ How much of the $120,000 cost should be allocated to feed if the value basis is used?

A) $ 12,250.
B) $ 42,000.
C) $ 45,000.
D) $ 70,000.
E) $ 100,000.