Answer the Following Questions Using the Information Below:
the Kenton

question 45

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 constant gross-margin percent for Kenton?

• A) 10%
• B) 6.3%
• C) 11%
• D) 6.5%

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