A dairy allocates the cost of unprocessed milk to the production of milk, cream, butter and cheese. For the current period, unprocessed milk was purchased for $240,000, and the following quantities of product and sales revenues were produced. How much of the $240,000 cost should be allocated to milk?
A) $0.
B) $86,400.
C) $90,000.
D) $133,333.
E) $240,000.

Question

Quizplus · Accepted Answer

To allocate the $240,000 cost based on sales revenue, we first need to calculate the total sales revenue and then determine the proportion of total sales that comes from milk. However, without the specific sales revenue figures for each product, we cannot accurately calculate the allocation. The choice of $86,400 (B) suggests a specific allocation method was used, possibly based on provided sales data or a given allocation key, but without the sales data or the allocation basis, we cannot provide the detailed calculation. This answer is based on the assumption that the correct allocation method was applied to arrive at choice B.

A Dairy Allocates the Cost of Unprocessed Milk to the Production