Answer the Following Question(s) Using the Information Below

question 34

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.
-When a product is the result of a joint process, the decision to process the product past the splitoff point further should be influenced by the

• A) total amount of the joint costs.
• B) portion of the joint costs allocated to the individual products.
• C) extra revenue earned past the splitoff point.
• D) extra operating income earned past the splitoff point.
• E) joint costs allocated under the NRV method.

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Definitions:

Precipitation

Any type of water, be it in liquid or solid state, which descends from the sky and lands on the Earth's surface, such as rain, snow, sleet, and hail.

Large Grazers

Large herbivorous animals that feed primarily on grass and other low-lying vegetation.

Semiarid Zones

Regions characterized by light rainfall, usually between 10 and 20 inches per year, often resulting in scanty vegetation and a steppe climate.