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The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage). Additional shrinkage occurred during additional processing as follows: Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon. The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March: Additional processing Quantity yield Products Quantity yield at split off cost per after additional gallon processing Condensed goat milk 35,640 gallons Skim goat milk $3.60 33,600 gallons 72,360 gallons $2.40 64,800 gallons Using estimated net realizable value, after allocating the $144,000 of joint costs, compute total cost per gallon of Xyla. Example of Answer: 4.67 or 0.30 or 2.00 (Two decimal points. No comma, space, or $ sign) A/

The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage). Additional shrinkage occurred during additional processing as follows: Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon. The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March: Additional processing Quantity yield Products Quantity yield at split off cost per after additional gallon processing Condensed goat milk 35,640 gallons Skim goat milk $3.60 33,600 gallons 72,360 gallons $2.40 64,800 gallons Using estimated net realizable value, after allocating the $144,000 of joint costs, compute total cost per gallon of Xyla. Example of Answer: 4.67 or 0.30 or 2.00 (Two decimal points. No comma, space, or $ sign) A/

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 27E: Pacheco, Inc., produces two products, overs and unders, in a single process. The joint costs of this...
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The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage). Additional shrinkage occurred during additional processing as follows: Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon. The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March: Additional processing Quantity yield Products Quantity yield at split off cost per after additional gallon processing Condensed goat milk 35,640 gallons Skim goat milk $3.60 33,600 gallons 72,360 gallons $2.40 64,800 gallons Using estimated net realizable value, after allocating the $144,000 of joint costs, compute total cost per gallon of Xyla. Example of Answer: 4.67 or 0.30 or 2.00 (Two decimal points. No comma, space, or $ sign) A/
Transcribed Image Text:The Atlanta Company processes unprocessed goat milk up to the split-off point where two products, condensed goat milk and skim goat milk result. Total cost of purchasing and processing 120,000 gallons of goat milk in Joint Process was $144,000 which resulted into 35,640 gallons of goat milk and 72,360 gallons of skim goat milk (the remaining materials was shrinkage). Additional shrinkage occurred during additional processing as follows: Condensed 35,640 gallons of goat milk is processed further at $3.60 per gallon to yield 33,600 gallons of a medicinal milk product, called Xyla (the remainder is shrinkage). Xyla can be sold for $21.60 per gallon. The 72,360 gallons of Skim goat milk can be processed further at $2.40 per gallon to yield 64,800 gallons of skim goat ice cream. Each gallon of skim goat ice cream can be sold for $14.40 per gallon. The following information was collected for the month of March: Additional processing Quantity yield Products Quantity yield at split off cost per after additional gallon processing Condensed goat milk 35,640 gallons Skim goat milk $3.60 33,600 gallons 72,360 gallons $2.40 64,800 gallons Using estimated net realizable value, after allocating the $144,000 of joint costs, compute total cost per gallon of Xyla. Example of Answer: 4.67 or 0.30 or 2.00 (Two decimal points. No comma, space, or $ sign) A/
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