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McBride's Dairy Has 200 Gallons of Heavy Cream and 600

question 89

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McBride's Dairy has 200 gallons of heavy cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It can sell each product at the split-off point or process it further in relatively similar processes, so management has decided that the most appropriate method for allocating joint costs is the market value at split-off point. One gallon of cream sells for $15, while one gallon of milk sells for $4. How much of the joint cost is allocated to skimmed milk? Round percentage calculations to the nearest whole percent.

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Definitions:

Variable Ratio

A reinforcement schedule in which responses are rewarded after a varied number of responses, enhancing motivation.

Puzzle Box

An experimental apparatus used in animal learning studies, especially with cats, to observe problem-solving behavior when an animal is placed in a confined space with a mechanism to open a door.

Mild Shocks

Low-intensity electrical stimuli used in various psychological experiments to study behavior, learning, and perception.

Operant

An action that is performed on an environment and has consequences.

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