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

question 125

Multiple Choice

McBride's Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It also incorporates a processing time weight factor of 1 for the cream and 3 for the skimmed milk. The amount of this cost that will be allocated to skimmed milk using the weighted average method is

• A)$1,000
• B)$900
• C)$100
• D)$750

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Definitions:

Exogenous

Factors or influences arising outside of a system that affect a model or process, without being affected in turn by that system.

Demand Shock

A sudden event that increases or decreases demand for goods or services in an economy, often leading to changes in prices and output.

Expansion Phase

A period in the business cycle when the economy moves from a trough to a peak, characterized by an increase in economic activity, production, and employment.

Prosperity

A state of economic well-being characterized by financial success, growth, and good fortune, where living conditions and quality of life are improved.