Garage Specialty Corporation Manufactures Joint Products P and Q The Joint Cost Allocated to P Under the Relative-Sales-Value Method

Multiple Choice

Garage Specialty Corporation manufactures joint products P and Q. During a recent period, joint costs amounted to $80,000 in the production of 20,000 gallons of P and 60,000 gallons of Q. Garage can sell P and Q at split-off for $2.20 per gallon and $2.60 per gallon, respectively. Alternatively, both products can be processed beyond the split-off point, as follows: $\begin{array}{lcc}&\underline{\mathrm{P}} & \underline{Q}\\\text { Separable processing costs } & \$ 15,000 & \$ 35,000 \\\text { Sales price (per gallon) if processed beyond split-off } &\$3&\$4 \\\end{array}$ The joint cost allocated to P under the relative-sales-value method would be:

A) $17,600.
B) $16,400.
C) $24,000.
D) $25,600.
E) None of the other answers are correct.