QUESTION 1

1. The Morton Company processes unprocessed goat milk up to the splitoff point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October:

   Direct Materials processed:	65,000 gallons
   Production:	condensed goat milk	26,100 gallons
   	skim goat milk	32,400 gallons
   Sales:	condensed goat milk	$3.50 per gallon
   	skim goat milk	$2.50 per gallon

   The costs of purchasing the 65,000 gallons of unprocessed goat milk and processing it up to the splitoff point to yield a total of 58,500 gallons of salable product was $72,240.

   Condensed goat milk may be processed further to yield 19600 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $3 per usable gallon. Xyla can be sold for $18 per gallon.

   Skim goat milk can be processed further to yield 26700 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $2.50. The product can be sold for $9 per gallon.

   What is the gross margin percentage that each joint product would have if NRV with constant gross margin were used?

   (Put your answer in the following form: .xxxx )

   For example 65.5% should be written as .6550 )