A Granary Allocates the Cost of Unprocessed Wheat to the Production

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced. $$\begin{array} { l c c } \text { Product } & \text { Pounds } & \text { Price per pound } \\\text { Feed } & 100,000 & \$ 0.70 \\\text { Flour } & 50,000 & 2.20 \\\text { Starch } & 20,000 & 1.00\end{array}$$ How much of the $120,000 cost should be allocated to flour if the value basis is used?

A) $24,500.
B) $84,000.
C) $66,000.
D) $70,000.
E) $200,000.

Correct Answer:

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