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Answer the Following Question(s) Using the Information Below

question 22

Multiple Choice

Answer the following question(s) using the information below:
The Morton 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 65,000 litres of unprocessed goat milk and processing it up to the splitoff point to yield a total of 58,500 litres of salable product was $72,240. There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 19,500 litres (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $3 per usable litre. Xyla can be sold for $18 per litre.
Skim goat milk can be processed further to yield 28,100 litres of skim goat ice cream, for an additional processing cost per usable litre of $2.50. The product can be sold for $9 per litre.
There are no beginning and ending inventory balances.
-What is the reason that accountants do not like to carry inventory at net realizable value?

Definitions:

Majoritarian

A governing principle where the majority's preferences or decisions are prioritized in the political process.

Pluralist

An advocate of a system in which power is distributed among multiple groups, allowing for a balance and a degree of influence in decision-making processes from varied social, economic, and cultural interests.

Gridlock

A situation in government where no progress is made due to the inability of the parties to reach a consensus or compromise, often resulting in legislative inaction.

Legislation

The process by which statutory laws are enacted by a legislative body through the proposal, debate, and voting on new bills.