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Question - Arkansas Corporation manufactures liquid chemicals A and B from a joint process. It allocates joint costs on the basis of sales value at split-off. Processing 5,000 gallons of product A and 1,600 gallons of product B to the split-off point costs $5,900. The sales value at split-off is $2.00 per gallon for product A and $25.00 per gallon for product B. Product B requires additional separable processing beyond the split-off point at a cost of $2.50 per gallon before it can be sold at a price of $34 per gallon. What is the company's cost to produce 1,600 gallons of product B?
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