Delite Confectionary Company Produces Various Types of Candies -
If Chocolate Delight Is Processed Further, the Gross Profit

question 31

Multiple Choice

Delite Confectionary Company produces various types of candies. Several candies could be sold at the split-off point or processed further and sold in a different form after further processing. The candies are produced in a joint processing operation with $500,000 of joint processing costs monthly, which are allocated based on pounds produced. Information concerning this process for a recent month appears below:
$\begin{array}{lr}&&&\text {Further}&\text {Price after}\\&\text { Number of }&\text {Price per pound at }&\text {processing }&\text {processing }\\\text { Candy type } &\text { pounds }&\text { split-off } &\text { costs } &\text { further }\\\text { Sweet Meats } & 50,000&\$8&\$75,000&\$10.00 \\\text { Chocolate } & 100,000&\$10&\$30,000&\$10.50 \\\text { Delight } & \\\text { Minty Wonders } & 25,000&\$5&\$20,000&\$5.50\end{array}$

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If Chocolate Delight is processed further, the gross profit margin that will appear in a product line income statement for Chocolate Delight (rounded to the nearest whole dollar) would be:

• A) $734,286.
• B) $520,000.
• C) $1,020,000.
• D) $632,596.

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Definitions:

Deposited

The process by which sediments, minerals, and other substances are laid down or settled in a new location.

Slowing

The reduction in speed or rate of an activity or process.

Current

A directional movement of water, which can be caused by temperature, salinity differences, wind, or tidal forces in the ocean.

Sediment

Particles or fragments of rocks, minerals, or organic materials that have been transported and deposited by wind, water, or ice.