The Green Company Processes Unprocessed Goat Milk Up to the Split-Off

question 43

Multiple Choice

The Green Company processes unprocessed goat milk up to the split-off point where two products,condensed goat milk and skim goat milk result.The following information was collected for the month of October:

The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 102,500 gallons of saleable product was $189,480.There were no inventory balances of either product.Condensed goat milk may be processed further to yield 44,500 gallons (the remainder is shrinkage) of a medicinal milk product,Xyla,for an additional processing cost of $6 per usable gallon.Xyla can be sold for $22 per gallon.
Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice cream,for an additional processing cost per usable gallon of $6.The product can be sold for $14 per gallon.
There are no beginning and ending inventory balances.
How much (if any) extra income would Green earn if it produced and sold all of the Xyla from the condensed goat milk? Allocate joint processing costs based upon relative sales value on the split-off.(Extra income means income in excess of what Green would have earned from selling condensed goat milk. ) (Round intermediary percentages to the nearest hundredth. )

• A)$621,566
• B)$277,100
• C)$554,500
• D)$350,554

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Definitions:

Par Value

The nominal or face value of a bond, share, or other financial instrument, traditionally the amount for which the security is issued.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and entitles the holder to a share of the company's profits through dividends.

Statement Of Comprehensive Income

A financial statement that includes all income, expenses, and comprehensive income items, presenting a complete picture of a company's financial performance.

Non-cash Item

Expenses or income that do not result in an actual cash outlay or receipt, like depreciation, amortization, or stock-based compensation.