Chapter 19, Problem 4CMA

Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000-gallon drums for $2.000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is $9 per gallon for Big and $4 per gallon for Mini. If the physical units method is used to allocate joint costs to the final products, the total cost allocated to produce Mini is:

1. a. $500.
2. b. $4,000.
3. c. $1,000.
4. d. $4,500.