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

question 150

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: $\begin{array}{lrrrrr}&\text { Sour Cream }&\text {Ice Cream}&\text { Yogurt}&\text { Butter }&\text {Total }\\\text { Units sold } & 2,000 & 500 & 400 & 2,000 & 4,900 \\\text { Revenue } & \$ 10,000 & \$ 20,000 & \$ 10,000 & \$ 20,000 & \$ 60,000 \\\text { Variable departmental costs } & 6,000 & 13,000 & 4,200 & 4,800 & 28,000 \\\text { Fixed costs } & 5,000 & 2,000 & 3,000 & 7,000 & 17,000 \\\text { Net income (loss) }&\$1,000&\$5,000&\$2,800&\$8,200&\$15,000\end{array}$ 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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