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: | 800,000 gallons (778,500 gallons of good product) |
| Production: | Cream | 443,500 gallons |
| Liquid skim | 335,000 gallons |
| Sales: | Cream | 424,500 at $130 per gallon |
| Liquid skim | 324,000 at $120 per gallon |
The cost of purchasing 800,000 gallons of direct materials and processing it up to the split-off point to yield a total of 778,500 gallons of good product was $2,350,000. Which of the following statements about Alfarm's joint production costs is true?
◦ The gross-margin percentage per gallon of Cream and Liquid skim are equal because joint costs are allocated based on the number of gallons.
◦ The gross-margin percentage per gallon of Cream is higher than gross margin percentage per gallon of Liquid skim because of Cream's higher production volume.
◦ The joint production cost per gallon of Cream and Liquid skim are equal because joint costs are allocated based on the number of gallons.
◦ The joint production cost per gallon of Cream is higher than joint production cost per gallon of Liquid skim because of Cream's higher production volume.
Bacteria exchange DNA by several processes
Graph showing how the boiling point of the coolant increases as the percentage of antifreeze in ...
Processes of the Middle and Upper Troposphere: Rossby Waves and Vorticity
Forest products and the economic value
Digestive Processes
A three-point mapping cross in Drosophila melanogaster