Answer the Following Questions Using the Information Below:
the Kenton

question 44

Multiple Choice

Answer the following questions using the information below:
The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:
Direct Materials processed: 18,000 gallons (after shrinkage)
$\begin{array}{|l|l|r|r|}\hline \text { Production: } & \text { Butter Cream } & 7,500 & \text { gallons } \\\hline & \text { Condensed Milk } & 10,500 & \text { gallons } \\\hline \text { Sales: } & \text { Butter Cream } & 7,000 & \text { gallons } \\\hline & \text { Condensed Milk } & 10,000 & \text { gallons } \\\hline \text { Sales Price: } & \text { Butter Cream } & \$ 3.5 & \text { per gallon } \\\hline & \text { Condensed Milk } & \$ 7.5 & \text { per gallon } \\\hline \begin{array}{l}\text { Separable costsin } \\\text { total: }\end{array} & \text { Butter Cream } & \$ 12,500 \\\hline & \text { Condensed Milk } & \$ 34,700\\\hline\end{array}$ The cost of purchasing the of unprocessed milk and processing it up to the splitoff point to yield a total of 18000 gallons of saleable product was $46,000.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.
-What is the allocated joint costs of Butter Cream?

• A) $35,200
• B) $12,500
• C) $34,700
• D) $10,800

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Definitions:

Nonunionized

Workplaces or employees that are not part of a labor union and do not engage in collective bargaining.

Efficiency Wages

Wages that are deliberately set above the market equilibrium level by employers to increase productivity and efficiency among employees.

Below-equilibrium

A situation where the quantity demanded exceeds the quantity supplied at a given price.

Principal-agent Problem

A dilemma in which one party (the agent) is expected to act in the best interest of another party (the principal) but may have the incentive to act in their own interest instead.