QUESTION 15 The Alfarm Corporation processes raw milk up to the splitoff point where two products, cream and liquid skim, are produced and sold. There was no beginning inventory. The following material was collected for the month of February: Direct materials processed: Production: Cream Liquid skim Sales: Cream Liquid skim 820,000 gallons (797,500 gallons of good product) 445,000 gallons 352,500 gallons 424,000 at $140 per gallon 342,500 at $130 per gallon The cost of purchasing 820,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 797,500 gallons of good product was $2,310,000. When using the physical-volume method, what is Cream's approximate production cost per gallon? (Round intermediary percentages to the nearest hundredth.) $2.60 $2.90 $2.82 $3.04 QUESTION 18 Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2015 are as follows: 22,700 units WIP, beginning inventory 12/1/2015 Direct materials (100% complete) Conversion costs (75% complete) Started during December Completed and transferred out 12/31/2015 WIP, ending inventory 12/31/2015 Direct materials (100% complete) Conversion costs (65% complete) 77,000 units 72,000 units 18,000 units Costs for December: WIP, beginning Inventory: Direct materials Conversion costs Direct materials added Conversion costs added $151,000 77,700 228,400 299,000 What cost is allocated to abnormal spoilage using the weighted-average process-costing method? O $37,582.15 O $77,700.00 O $31,500.00 O $0