The Brital Company Processes Unprocessed Milk to Produce Two Products,Butter

question 72

Multiple Choice

The Brital Company processes unprocessed milk to produce two products,Butter Cream and Condensed Milk.The following information was collected for the month of June:


The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 31,500 gallons of saleable product was $109,025.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production.If separable costs of Butter Cream was $19,000 and constant gross margin was 30%,what would have been the total allocated joint costs of production?

• A)$109,025
• B)$35,600
• C)$97,400
• D)$163,625

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Definitions:

Income Tax Expense

The cost incurred by businesses and individuals related to the taxes on their income, reflecting the amount of income tax that a company is obligated to pay to tax authorities.

Incremental Net Cash

The difference in net cash flows between two alternatives, emphasizing the additional cash brought in by a certain decision.

Tax Rate

The percentage at which an individual or corporation is taxed.

Incremental Net Income

The increase in net income resulting from a particular business decision or activity, compared to what it would have been without that decision or activity.