Wren Pork Company uses the value basis of allocating joint costs in its production of pork products. Relevant information for the current period follows:

Product Pounds Price/lb.

Loin chops 3,000 $5.00

Ground 10,000 2.00

Ribs 4,000 4.75

Bacon 6,000 3.50

The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?

a. $0.

b. $5,909.

c. $8,600.

d. $10,750.

e. $43,000.

c. $8,600

Explanation:

The computation of the cost of Wren Pork allocate to Loin chops is shown below:-

Total Joint Cost * (Loin Chops sales value : (Loin Chops sales value + Ground Sales value + Ribs sales value + Bacon Sales value)

= $43,000 * ((3,000 * $5) : (3,000 * $5) + (10,000 * $2) + (4,000 * $4.75) + (6,000 * $3.5))

=$8,600

So, for computing the cost of Wren Pork allocate to Loin chops, we simply applied the above formula.