Answer the Following Questions Using the Information Below:
the Kenton

question 65

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.
-Which of the following statements is true of Kenton's joint cost allocations?

• A) The gross margin is same for both products because constant gross margin percentage NRV method ignores profits earned before the splitoff point.
• B) One product can receive negative joint costs allocations to bring the other unprofitable product to the overall average gross margin.
• C) Kenton has chosen the easiest method for allocating its joint costs of production.
• D) The gross profit percent of condensed milk is lower than the gross profit of butter cream.

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Definitions:

False Feedback

The provision of incorrect information or evaluation to individuals regarding their performance or abilities, often used in psychological experiments to assess reactions or behaviors.

Expectations Of Success

The belief or anticipation regarding the level of success one will achieve in a specific endeavor.

Better Performance

Refers to the improvement in efficiency, effectiveness, or quality of an individual's or system's output.

Attraction To Group-Social

The inclination of individuals to be drawn to and desire affiliation with groups for social connection and identity.