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The Alfa Corporation processes raw milk up to the split-off point where two products, cream and liquid skim, are produced and sold. There was no
The Alfa Corporation processes raw milk up to the split-off 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: - Process of 750,000 gallons of materials yield 727,5000 gallons of good product - 442,500 gallons of Cream and 285,000 gallons of Liquid skim. - Each gallon of Cream is sold at $110 per gallon, and each Iallon of Liquid skim is sold at $100 per gallon. The cost of purchasing 750,000 gallons of direct materials and processing it up to the split-off point to yield a total of 727,500 gallons of good product was $2,280,000. When using the physical-volume method, what is Cream's approximate production cost per gallon? a) $3.03 b) $3.31 c) $3.13 d) $3,21
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