Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from the same...
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Anderson Compounds produces two industrial chemical compounds, Gorp and Gumm, from the same process, which last year, cost $480,000. Anderson produced 20,000 pounds of Gorp, which sells for $60 per gallon and 60,000 gallons of Gumm, which sells for $30 per gallon. After the split-off point, Gorp required additional processing costing $300,000 to make it salable. Using the adjusted sales method, how much of the joint cost should be allocated to Gorp?
a. $160,000
b. $120,000
c. $320,000
d. $192,000
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