Author Question: The Alfarm Corporation processes raw milk up to the split-off point where two products, cream and ... (Read 83 times)

mikaylakyoung · **on:** Mar 6, 2021

The Alfarm 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:

Direct materials processed:

820,000 gallons (797,500 gallons of good product)

Production:

Cream

443,000 gallons

Liquid skim

354,500 gallons

Sales:

Cream

424,000 at $130 per gallon

Liquid skim

344,500 at $115 per gallon

The cost of purchasing 820,000 gallons of direct materials and processing it up to the split-off point to yield a total of 797,500 gallons of good product was $2,350,000. What are the physical-volume proportions to allocate joint costs for cream and liquid skim, respectively?
◦ 54.02% and 45.98%
◦ 55.55% and 44.45%
◦ 50.00% and 50.00%
◦ 53.17% and 46.83%

ngr69 · **Reply #1 on:** Mar 6, 2021

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