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

question 78

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 760,000 gallons of direct materials and processing it up to the split-off point to yield a total of 738,000 gallons of good product was $2,350,000.When using the physical-volume method,what is Cream's approximate production cost per gallon? (Round intermediary percentages to the nearest hundredth. )

• A)$2.64
• B)$3.09
• C)$3.18
• D)$3.33

Know the structure and components of a cost reconciliation report in process costing.

Distinguish between the weighted-average and first-in, first-out (FIFO) methods of process costing and the implications on equivalent units calculation.

Understand the journal entries associated with transactions in a process costing system.

Realize the role of materials, labor, and overhead (conversion costs) in the computation of equivalent units and overall product cost in a process costing environment.

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Definitions:

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