The Green Company Processes Unprocessed Goat Milk Up to the Split-Off

question 113

Multiple Choice

The Green Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. The following information was collected for the month of October:

The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 100,500 gallons of saleable product was $191,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 42,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $6 per usable gallon. Xyla can be sold for $21 per gallon.
Skim goat milk can be processed further to yield 56,700 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $6. The product can be sold for $14 per gallon.
There are no beginning and ending inventory balances.
What is the estimated net realizable value of Xyla at the split-off point?

• A) $453,600
• B) $464,000
• C) $630,000
• D) $637,500

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Definitions:

Stereochemical Detail

Aspects of a molecule that involve the spatial arrangement of atoms, crucial for understanding the behavior and reactivity of different molecular isomers.

Major Product

The substance that is formed in the greatest quantity in a chemical reaction, as determined by reaction pathways and conditions.

Regio-

A prefix in chemistry indicating the region or specific position within a molecule where a reaction takes place.

Stereochemical Detail

Information about the spatial arrangement of atoms within molecules, important for understanding the behavior and reactivity of different isomers.