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Joint products are accounted for using the NRV method. The company's production process follows: (1) In the first stage, the raw milk is processed into

Joint products are accounted for using the NRV method.

The company's production process follows: (1) In the first stage, the raw milk is processed into pasteurized milk. (2) In the second stage, the pasteurized milk is processed further into plain yogurt, vanilla yogurt, and whey.

DIRECT MATERIALS INPUTS
Input Gallons Cost per gallon Total direct materials cost
Raw milk (stage 1) 150,000 $ 3.25 $ 487,500
Vanilla (stage 2) 100 $ 250.00 $ 25,000
Total 150,100
CONVERSION INPUTS
Input Fixed conversion cost Variable conversion cost Total conversion cost
stage 1 $ 16,000 $ 44,000 $ 60,000
stage 2 $ 12,000 $ 8,000 $ 20,000
FINAL OUTPUTS
Product Gallons Sales price per gallon Packaging cost per gallon Total sales Total packaging cost
Plain yogurt 50,000 $ 5.00 $ 0.15 $ 250,000 $ 7,500
Vanilla yogurt 70,100 $ 6.00 $ 0.15 $ 420,600 $ 10,515
Whey 20,000 $ 0.25 $ 0.05 $ 5,000 $ 1,000
Shrinkage (evaporation) 10,000 N/A N/A N/A N/A
Total 150,100 $ 675,600 $ 19,015

What is the total amount of joint costs allocated to the whey?

What is the total cost per gallon of the vanilla yogurt?

A local cheese manufacturer has offered to buy all of Wanda's Dairy Co.'s pasteurized milk for the month at a sales price of $4.40 per gallon. What is the change in the company's profits if they choose to sell the pasteurized milk rather than the yogurt and whey?

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