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.ProductPounds Price per PoundFeed100,000 $0.70 Flour50,000 2.20 Starch20,000 1.00 How much of the $120,000 cost should be allocated to feed if the value basis is used?
A. $100,000.
B. $70,000.
C. $42,000.
D. $12,250.
E. $45,000.
Answer: C
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