Answer the Following Question(s)using the Information Below

question 90

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.
-Using the sales value at splitoff method, what is the gross margin percentage for skim goat milk at the splitoff point?

• A)21.1%
• B)55.1%
• C)58.1%
• D)38.2%
• E)41.9%

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Definitions:

Demand for

The desire and willingness of consumers to purchase a specific quantity of goods or services at a given price over a particular period.

Mustard Recall

A situation where mustard products are withdrawn from the market due to safety concerns like contamination or mislabeling.

Demand for Relish

Refers to the consumer desire and willingness to pay for relish, a condiment, which can be influenced by factors such as price, consumer preferences, income levels, and substitute goods.

Decrease in Demand

A condition where consumers show less interest in purchasing a product, leading to a leftward shift in the demand curve.