Laredo manufactures nuts and bolts from a joint process (cost = $80,000). five thousand pounds of nuts can be sold at split-off for $20 per pound; ten thousand pounds of bolts can be sold at split-off for $15 per pound. for product costing purposes laredo allocates joint costs using the relative sales value method. the amount of joint cost allocated to nuts and bolts, respectively, would be

Cost for Nuts = $80,000 2/5 = $32,000

Cost for bolts = $80,000 3/5 = $48,000

Explanation:

Provided joint cost = $80,000

Total quantity of nuts and bolts at separation

Nuts = 5,000 pounds

Bolts = 10,000 pounds

Weights of cost will be based on value of goods.

Nuts = 5,000 $20 = $100,000

Bolts = 10,000 $15 = $150,000

Thus, weights will be 10:15 = 2:3

Cost for Nuts = $80,000 2/5 = $32,000

Cost for bolts = $80,000 3/5 = $48,000

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