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8 A company produces a skim milk and cream from whole milkin batches for sales. During a month of production with no beginning inventore the

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8 A company produces a skim milk and cream from whole milkin batches for sales. During a month of production with no beginning inventore the company processed 120,000 gallons of direct materials (797.500 gallons of good products. The cost of purchaung the direct matenah wal Dh2,350,000. The good products were obtained from 354.500 gallons of skim milk and 441.000 gallons of cream. The company sold 344,500 gallons of skim milk at Dh115 per gation and 424,000 gations of cream at Dh 130 per gation. Their respective separable processing costs are Dh50 pe gallon for som milk and Dh65 per gallon for cream Required: 1. Calculate the respective joint costs per batch of skim milk and to cream based on the number of gallons at splitof point. marks) 2. Calculate the respective joint costs per batch of skim milk and to cream based on net realizable value at splitoff point. 3 marks) 3. "Managers should consider only additional revenues and separable costs when making decisions about selling at splitoff or processing further." Do you agree? Explain. B marks) Paragraph - 1 2 =

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