Answer the Following Questions Using the Information Below

question 80

Multiple Choice

Answer the following questions using the information below:
The Gows Company processes unprocessed goat milk up to the splitoff 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 130,000 gallons of unprocessed goat milk and processing it up to the splitoff point to yield a total of 117,000 gallons of salable product was $144,480. There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 39,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $3 per usable gallon. Xyla can be sold for $18 per gallon.
Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $2.50. The product can be sold for $9 per gallon.
There are no beginning and ending inventory balances.
-What is the estimated net realizable value of Xyla at the splitoff point?

• A)$365,300
• B)$505,800
• C)$585,000
• D)$702,000

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Definitions:

Basilar Cells

Specialized cells found in the organ of Corti within the cochlea of the inner ear, which play a role in the hearing process by supporting the hair cells responsible for converting sound vibrations into electrical signals.

Ossicles

Three small bones located in the middle ear known as the malleus, incus, and stapes, which transmit sound vibrations from the eardrum to the inner ear.

Cochleas

Spiral-shaped organs located in the inner ear responsible for converting sound waves into electrical signals that can be interpreted by the brain.

Gustatory Perception

The sensory impression of food or other substances on the taste buds of the tongue.