HomeworkLib
Question

The Green Company processes unprocessed goat milk up to the split-off point where two products, condensed...

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:

        Direct Materials processed:       105,000 gallons (after shrinkage)

        Production:                                   Condensed goat milk      45,500 gallons

                                                                Skim goat milk                  59,500 gallons

        Sales:                                              Condensed goat milk      $4.50 per gallon

                                                                Skim goat milk                  $4.00 per gallon

The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to yield a total of 105,000 gallons of saleable product was $191,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 45,000 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $5 per usable gallon. Xyla can be sold for $20 per gallon.

Skim goat milk can be processed further to yield 58,200 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $5. The product can be sold for $12 per gallon.

There are no beginning and ending inventory balances.

Using the sales value at split-off method, what is the gross-margin percentage for skim goat milk at the split-off point? (Round intermediary percentages to the nearest hundredth.)

A.

46.25%
B.

50.00%
C.

56.75%
D.

53.75%
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The correct answer is C) 56.75 %

Explanation and calculation

Firstly we have to calculate the total sale value at split off point

= sale value of condensed goat milk + skimmed goat milk

= (45500*4.5)+ (4*59500)

= 204750 +238000

= $ 442750

Joint cost of skimmed goat milk at split off point

= sale value of skimmed goat milk at split off / total sale value

= 238000/442750*191480

= $ 102930

Gross margin percentage = gross margin / sale value at split off point

= ((238000-102930)/238000)*100

= 56.75 %

Thus the final answer is C) 56.75 %

0 0
Add a comment
Know the answer?
Add Answer to:
The Green Company processes unprocessed goat milk up to the split-off point where two products, condensed...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Problem 2: The Green Company processes unprocessed goat milk up to the splitoff point where three products, condensed goat milk, skim goat milk, and cream result. The following information was collec...

    Problem 2: The Green Company processes unprocessed goat milk up to the splitoff point where three products, condensed goat milk, skim goat milk, and cream result. The following information was collected for the month of October: Direct Materials processed: Production: 240,000 gallons (after shrinkage) 92,500 gallons 105,500 gallons 42,000 gallons $12.50 per gallon $4.50 per gallon $20 per gallon Condensed goat milk Skim goat milk Cream Sales Condensed goat milk Skim goat milk Cream The costs of purchasing the of...

  • The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The...

    The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June: Direct Materials processed:           22,500 gallons (after shrinkage) Production: Butter Cream 12,000 gallons Condensed Milk 10,500 gallons Sales: Butter Cream 11,500 gallons Condensed Milk 10,000 gallons Sales Price: Butter Cream $3.50 per gallon Condensed Milk $9.00 per gallon Separable costs in total: Butter Cream $15,000 Condensed Milk $35,800 The cost of purchasing the of unprocessed milk and...

  • The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The...

    The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June: Direct Materials processed:         27,500 gallons (after shrinkage) Production: Butter Cream 12,500 gallons Condensed Milk 15,000 gallons Sales: Butter Cream 12,000 gallons Condensed Milk 14,500 gallons Sales Price: Butter Cream $4.50 per gallon Condensed Milk $8.00 per gallon Separable costs in total: Butter Cream $13,000 Condensed Milk $35,600 The cost of purchasing the of unprocessed milk and...

  • only 1 2 5 8 need help now ond Company processes 12750 allons of direct m Product Y. Product X sells for 57 per ga...

    only 1 2 5 8 need help now ond Company processes 12750 allons of direct m Product Y. Product X sells for 57 per gallon The following information is for December Chapter 16 Review an hand t erials to produto products Product Y, the main product sells for $160 per ga Production Product X: Product Y: Beginning Inventory Ending Inventory 5425 10,175 Sales 5300 10,170 125 The manufacturing costs totalled $27,000 25 The production method will report Product X in...

  • 11) The Great Foods Company processes milk into skim milk and butter. This year 70,000 litres...

    11) The Great Foods Company processes milk into skim milk and butter. This year 70,000 litres of milk will be processed, costing $40,000. If processed to the split-off point, this will yield 40,000 litres of skim milk and 10,000 kilograms of butter. Skim milk is sold to distributors for $1 per litre and butter is sold for $0.75 per kilogram. Great Foods has the option of processing the two products further. Skim milk can be processed into canned, sweetened and...

  • Chem Manufacturing Company processes direct materials up to the split off point, where two products (X...

    Chem Manufacturing Company processes direct materials up to the split off point, where two products (X and Y) are obtained and sold. The following information was collected for the month of November. Direct materials processed: 10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage) Production: X 5,000 litres Y 4,500 litres Sales: X 4,750 at $150 per litre Y 4,000 at $100 per litre The cost of purchasing 10,000 litres of direct materials and...

  • XYZ Company makes two products, W and P, in a joint process. At the split-off point,...

    XYZ Company makes two products, W and P, in a joint process. At the split-off point, 60,000 units of Product W and 50,000 units of Product P are available each month. Monthly joint production costs total $120,000 and are allocated to the two products equally. Product W can either be sold at the split-off point for $5.60 per unit or it can be processed further and then sold for $8.80 per unit. If Product W is processed further, addi tional...

  • Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...

    Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $47,500 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $ 28,500 $ 19,000 $ 47,500 Sales value at split-off point...

  • Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...

    Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $51,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $ 20,400 $ 30,600 $ 51,000 Sales value at split-off point...

  • Iaci Company makes two products from a common input. Joint processing costs up to the split-off...

    Iaci Company makes two products from a common input. Joint processing costs up to the split-off point total $53,700 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $ 20,400 $ 33,300 $ 53,700 Sales value at split-off point...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT