The Alfarm Corporation Processes Raw Milk Up to the Split-Off

question 94

Multiple Choice

The Alfarm Corporation processes raw milk up to the split-off point where two products,cream and liquid skim,are produced and sold.There was no beginning inventory.The following material was collected for the month of February:

The cost of purchasing 820,000 gallons of direct materials and processing it up to the split-off point to yield a total of 797,500 gallons of good product was $2,350,000.What are the physical-volume proportions to allocate joint costs for cream and liquid skim,respectively?

• A)54.02% and 45.98%
• B)55.55% and 44.45%
• C)50.00% and 50.00%
• D)53.17% and 46.83%

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Definitions:

Independent Variable

The variable in a study or experiment that is manipulated or considered as the cause to determine its effect on a dependent variable.

Dependent Variable

The variable in an experiment that is expected to change as a result of manipulations to the independent variable.

Highly Correlated

Refers to two or more variables that have a strong linear relationship with each other, indicated by a correlation coefficient close to either 1 or -1.

Linear Regression Model

An approach in statistics that aims to represent the connection between a dependent variable and one or more independent variables through the application of a linear equation to the data observed.