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What is the estimated net realizable value of Xyla at the splitoff point? The Green Company processes unprocessed goat milk up to the split -
What is the estimated net realizable value of Xyla at the splitoff point?
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: Condensed goat milk Skim goat milk Condensed goat milk Skim goat milk 102,000 gallons (after shrinkage) 43,000 gallons 59,000 gallons $4.25 per gallon $3.75 per gallon Sales: The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 102.000 gallons of saleable product was $188.480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 42,500 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 $22 per gallon. Skim goat milk can be processed further to yield 57,700 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $4. The product can be sold for $10 per gallon. There are no beginning and ending inventory balances. O A. $774,000 OB. $346,200 O C. $765,000 OD. $354,000Step by Step Solution
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