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:
Direct Materials processed:28,000 gallons

The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 28,000 gallons of saleable product was $113,100.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. If separable costs of Butter Cream was $17,500 and constant gross margin was 20%, what would have been the allocated joint costs of Condensed Milk?
A) $20,900
B) $34,900
C) $92,200
D) $87,200

Question

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:
Direct Materials processed:28,000 gallons

The costs of purchasing the of unprocessed milk and processing it up to the split-off point to yield a total of 28,000 gallons of saleable product was $113,100.
The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. If separable costs of Butter Cream was $17,500 and constant gross margin was 20%, what would have been the allocated joint costs of Condensed Milk?
A) $20,900 
B) $34,900 
C) $92,200 
D) $87,200

Quizplus · Accepted Answer

11ea1398_f0d6_6394_a1e4_29d3361ef425_TB3027_00

The Brital Company Processes Unprocessed Milk to Produce Two Products