Anderson Compounds produces two industrial chemical compounds,
Gorp and Gumm, from the same process, which last year, cost
$480,000. Anderson produced 20,000 pounds of Gorp, which sells for
$60 per gallon and 60,000 gallons of Gumm, which sells for $30 per
gallon. After the split-off point, Gorp required additional
processing costing $300,000 to make it salable. Using the adjusted
sales method, how much of the joint cost should be allocated to
Gorp?
a. $160,000
b. $120,000
c. $320,000
d. $192,000