Question
The Green Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. The
The Green Company processes unprocessed goat milk up to the split-off 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 Production: 98,000 gallons (after shrinkage) Condensed goat milk Skim goat milk 42,500 gallons 55,500 gallons $5.25 per gallon Skim goat milk $4.50 per gallon Sales: Condensed goat milk The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 98,000 gallons of saleable product was $189,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 42,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $5 per usable gallon. Xyla can be sold for $20 per gallon. OA. $540,594 OB. $75,450 OC. $406,875 OD. $225,126
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