The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 5 comma 000 widgets; 8 comma 750 gizmos; and 10 comma 250 turnbols. Respective per unit selling prices at splitminusoff are $ 85, $ 55, and $ 25. Joint costs up to the splitminusoff point are $ 190 comma 000. If joint costs are allocated based upon the sales value at splitminusoff, what amount of joint costs will be allocated to the widgets? (Do not round any intermediary calculations.)

$41,881

Explanation:

Determine the sales value of Turnbols at split-off as follows:

Sales Value of = Number of units x Selling Price Tumbols at split-off ]

= 10,250 x $25 = $256,250

Determine the total sales value of all products at the split-off.

Total Sales Value=(5,000 x $85) + (8,750x $55) + (10,250x $25)

= $425,000 + $481,250 +$256,250 = $1,162,500

Amount of joint costs to be allocated to turnbols:

Joint costs to Turnbols=

Sales Value of Turnbols at splitoff/ Total Sales Value of all products x Joint Costs

Joint costs to Turnbols =$256,250/1,162,500 x $190,000

= $41,881

Therefore the amount of joint costs that will be allocated to the widgets is $41,881

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