The council members of a small town have decided that the earth levee that protects the town from flooding should be rebuilt and strengthened. The town engineer estimates that the cost of the work at the end of the first year will be $85,000. He estimates that in subsequent years the annual repair cost will decline by $10,000 each year, making the second year cost $75,000; the third year $65,000 and so forth. The council members want to know what the equivalent present cost is for the first five years of repair work if interest is 4%.

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.