Liquid skin on a physical-quantity basis

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Reference no: EM131211187

Killian Company manufactures two skin care lotions, Liquid Skin and Silken Skin, out of a joint process. The joint (common) costs incurred are $420,000 for a standard production run that generates 180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin. Liquid Skin sells for $2.40 per gallon, and Silken Skin sells for $3.90 per gallon.

If additional processing costs beyond the split-off point are $1.40 per gallon for Liquid Skin and $.90 per gallon for Silken Skin, the amount of joint cost of each production run allocated to Liquid Skin on a physical-quantity basis is

A. $252,000.

B. $280,000.

C. $140,000.

D. $168,000.

Reference no: EM131211187

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