Garvin Corporation Manufactures Joint Products P1 and P2 The Joint Cost Allocated to P2 Under the Relative-Sales-Value Method

Multiple Choice

Garvin Corporation manufactures joint products P1 and P2. During a recent period, joint costs amounted to $30,000 in the production of 10,000 gallons of P1 and 20,000 gallons of P2. Garvin can sell P1 and P2 at split-off for $2.00 per gallon and $2.50 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows: $\begin{array} { l r r } & \text { P1 } & \text { P2 } \\\text { Separable Processing costs } & \$ 2,500 & \$ 3,500 \\\text { Sales price per gallon if processed beyond split-off } & \$ 2.70 & \$ 3.00\end{array}$ The joint cost allocated to P2 under the relative-sales-value method would be:

A) $8,571.43.
B) $13,333.33.
C) $16,666.67.
D) $21,428.57.
E) $30,000.00