Serene Dairy Has Four Product Lines: Sour Cream, Ice Cream

question 105

Multiple Choice

Serene Dairy has four product lines: sour cream, ice cream, yogurt, and butter. The total cost of producing the milk base for the products is $45,000, which has been allocated based on the gallons of milk base used by each product. Results for July follow: How much are total joint costs of the products?

• A)$28,000
• B)$17,000
• C)$45,000
• D)$15,000

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Definitions:

Equilibrium Price

The price point at which the supply of goods matches demand, leading to a stable market condition.

Income

The financial gain received from labor, capital, or the management of assets, usually measured over a certain period of time.

Tortilla Chips

A type of snack food made from corn tortillas cut into wedges and then fried or baked.

Equilibrium Price

The price at which the quantity of goods or services supplied is equal to the quantity demanded, leading to market balance.