A. This answer results from allocating the full $6,000 in processing costs between the two products. However, only the joint processing cost of $5,000 is allocated between the two products. The $1,000 incurred to process Giant further is Giant's cost alone.

B. This is the amount of joint cost allocated to Giant. However, the question asks for the total cost of producing Giant, not only the amount of the joint cost allocated to Giant. In addition to the joint cost, there will be additional processing costs incurred by Giant.

C. This answer results from two errors: first, using the revenue from the sale of Giant, $17 × 600 units, or $10,200, as the NRV for Giant without reducing Giant's revenue for the $1,000 of additional processing costs; and second, allocating the full $6,000 in processing costs between the two products. Only the joint costs totaling $5,000 are allocated between the two products. The $1,000 in additional processing costs is incurred solely by Giant.

D. The joint costs to be allocated total $5,000 ($2,000 to purchase Duo and $3,000 to process it into Big and Mini). The net realizable value for Giant is (600 × $17) minus the additional processing costs of $1,000, which equals $9,200. The sales price for Mini will be used as its net realizable value in this allocation, since it will not be processed further. That is (200 × $4), or $800. The total of the two values is $10,000 ($9,200 + $800), and Giant's NRV of $9,200 represents 92% of that. Therefore, 92% of the joint cost of $5,000, or $4,600, will be allocated to Giant. However, the question asks for the total cost of producing Giant, not just the amount of the joint cost allocated to Giant. In addition to the joint cost of $4,600, there will be $1,000 of additional processing costs incurred by Giant. Therefore, the total cost of producing Giant is $4,600 + $1,000, or $5,600.