The Green 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:		104000 gallons (after shrinkage)
Production:	Condensed goat milk	45000 gallons
	Skim goat milk	59000 gallons
Sales:	Condensed goat milk	$3.5 per gallon
	Skim goat milk	$2.5 per gallon

The costs of purchasing the of unprocessed goat milk and processing it up to the splitoffpoint to yield a total of 104000 gallons of saleable product was 187480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 44500 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $6 per usable gallon. Xyla can be sold for $20 per gallon.

Skim goat milk can be processed further to yield 57700 gallons of skim goat milk ice cream, for an additional processing cost per usable gallon of $6. The product can be sold for $13 per gallon. There are no beginning and ending inventory balances.

How much (if any) extra income would Green earn if it produced and sold skim milk ice cream from goats rather than skim goat milk? Allocate joint processing costs based upon the relative sales value at the splitoffpoint. (Do not round intermediary percentages.)

Question content area bottom

Part 1

A.$ 256,400

B.$ 465,500

C.$ 313,233

D.$ 526,187