Using the details provided, respond to the following query: Up until the moment of split-off, where two products, cream and liquid skim, are made and sold, Alfarm Corporation processes raw milk. There was no initial stockpile. For the month of February, the following information was gathered: Direct materials processed: 750,000 gallons (727,500 gallons of good product)          Production: Cream 442,500 gallons                                  Liquid skim 285,000 gallons        Sales: Cream 421,500 at $110 per gallon                                     Liquid skim 273,000 at $100 per gallon The cost of purchasing 750,000 gallons of direct materials and processing it up to the split-off point to yield a total of 727,500 gallons of good product was $2,280,000. When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to cream and liquid skim?   Select one: a. $1,254,000 and $1,026,000 b. $1,368,000 and $912,000 c. $1,386,804 and $893,196 d. $1,140,000 and $1,140,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Using the details provided, respond to the following query:

Up until the moment of split-off, where two products, cream and liquid skim, are made and sold, Alfarm Corporation processes raw milk. There was no initial stockpile. For the month of February, the following information was gathered:

Direct materials processed: 750,000 gallons (727,500 gallons of good product)

 

       Production: Cream 442,500 gallons

                                 Liquid skim 285,000 gallons

       Sales: Cream 421,500 at $110 per gallon

                                    Liquid skim 273,000 at $100 per gallon

The cost of purchasing 750,000 gallons of direct materials and processing it up to the split-off point to yield a total of 727,500 gallons of good product was $2,280,000.

When using a physical-volume measure, what is the approximate amount of joint costs that will be allocated to cream and liquid skim?

 

Select one:
a.
$1,254,000 and $1,026,000
b.
$1,368,000 and $912,000
c.
$1,386,804 and $893,196
d.
$1,140,000 and $1,140,000 

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