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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
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: 101,000 gallons (after shrinkage) Production: Condensed goat milk 44,500 gallons Skim goat milk 56,500 gallons Sales: Condensed goat milk $4.75 per gallon Skim goat milk $3.75 per gallon The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 101,000 gallons of saleable product was $187,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 44,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $4 per usable gallon. Xyla can be sold for $20 per gallon. Skim goat milk can be processed further to yield 55,200 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $4. The product can be sold for $12 per gallon. There are no beginning and ending inventory balances. How much (if any) extra income would Green earn if it produced and sold all of the Xyla from the condensed goat milk? Allocate joint processing costs based upon relative sales value on the split - off. (Extra income means income in excess of what Green would have earned from selling condensed goat milk. Round intermediary percentages to the nearest hundredth.) O A. $347,749 OB. $492,625 Oc. $229,725 OD. $610,371
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