Question

a granary allocates the cost of unprocessed wheat to the production of feed flour and starch 100000. how much of the 120000 cost should be allocated to feed if the value basis is used

Answer 1

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Answer:

$42,000

Explanation:

Product __ pound ___ price/pound ____ value

Feed ___ 100000 ____ 0.70 ________ 70000

Flour ___ 50000 _____ 2.20 ________ 110000

Starch __ 20000 _____ 1.00 ________ 20000

Total value _____________________ 200000

In value basis :

Feed's percentage of total value :

(Feed value / total value) * 100%

(70000 / 200000) * 100%

0.35 * 100% = 35%

Feed percentage * joint cost

35% * 120,000 = 42,000