The Brital Company Processes Unprocessed Milk to Produce Two Products

question 107

Multiple Choice

The Brital Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:
Direct Materials processed:31,500 gallons

The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 31,500 gallons of saleable product was $109,025.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. If separable costs of Butter Cream was $19,000 and constant gross margin was 30%, what would have been the total allocated joint costs of production?

• A) $109,025
• B) $35,600
• C) $97,400
• D) $163,625

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Definitions:

Investment Revenue

Income earned from various forms of investments like stocks, bonds, and real estate properties.

Impairment

A decrease in the recoverable value of an asset below its carrying amount, necessitating an accounting adjustment.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence over the company but does not have full control.

Investment Account

A financial account that holds securities, stocks, bonds, and other investments for a long-term goal.