Cambridge Company manufactures three main products, L, M, and N, from a joint process. Additional information for June production activity follows: L M N Total Units produced 50,000 40,000 10,000 100,000 Joint costs ? ? ? $450,000 Sales value at split-off$420,000 $270,000 $60,000 $750,000 Additional costs if process further$88,000 $30,000 $12,000 $130,000 Sale value if processed further$538,000 $320,000 $78,000 $936,000 Assuming that the 10,000 units of N were processed further and sold for $78,000, what was Cambridge's gross profit from this sale? Assume the physical quantities method of allocation is used.
A. $30,000.
B. $66,000.
C. $28,500.
D. $21,000.
Answer: D
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