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

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Definitions:

Operations

The day-to-day activities involved in running a business, including production, sales, and administration, aimed at generating profits.

Total Assets Ratio

A financial metric used to assess the proportion of a company's assets that are financed by its shareholders.

Average Total Assets

Average total assets is a metric that represents the average value of all the assets owned by a company over a specific time period, indicating the company's asset size and usage efficiency.

Financing Activities

Transactions that involve raising capital and repaying investors, influencing the equity and debt of a company.