The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage). Additional shrinkage occurred during additional processing as follows: Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon. The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March: Products Quantity yield at split off Additional processing cost per gallon Quantity yield after additional processing Condensed goat milk 35,640 gallons $3.60 33,600 gallons Skim goat milk 72,360 gallons $2.40 64,800 gallons Using physical-measure method, what amount of the $144,000 of joint costs would be allocated to the skim goat ice cream?
The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage).
Additional shrinkage occurred during additional processing as follows:
Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon.
The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March:
|
Products |
Quantity yield at split off |
Additional |
Quantity yield after additional processing |
|
Condensed goat milk |
35,640 gallons |
$3.60 |
33,600 gallons |
|
Skim goat milk |
72,360 gallons |
$2.40 |
64,800 gallons |
Using physical-measure method, what amount of the $144,000 of joint costs would be allocated to the skim goat ice cream?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
