Montreal Dairy Products Corp buys full cream and refines it into butter and buttermilk. From
each liter of cream, Montreal produces 500 (1/2 kg.) grams of butter and two cups of buttermilk. During
November Montreal purchased 10,000 litres of cream for $30,000. Montreal spent another
$20,000 on the churning process to separate the cream into butter and buttermilk. Butter
can be immediately sold for $5 per kilogram and buttermilk could be sold immediately for
$2 per cup. There are 1000 grams in one kilogram and 5 cups of buttermilk weighs one kilogram.
At management's discretion, the butter can be further processed into spreadable butter by
mixing it with canola oil incurring an extra cost of $.40 per KG of butter processed. This process
results in two tubs of spreadable butter for each kilogram of butter processed. Each tub of
spreadable butter sells for $6.00.
By diluting the buttermilk, one cup of the buttermilk can be processed into two cups of skim
milk. The processing costs are $1 for each cup of buttermilk processed, but the skim milk can
be sold for $2.00 per cup.
REQUIRED:
1	Allocate the joint cost of the cream if the products are not processed further
	using the sales value at split off method and then the physical-measure method.
2	Allocate the joint cost of the cream if the products are processed further
	using the net realizable value method.