Reference no: EM132462195

The Green Company processes unprocessed goat milk up to the splitoff 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

104,000 gallons (After shrinkage)

Production

Condensed goat milk = 46,000 gallons

Skim goat milk = 58,000 gallons

Sales

Condensed goat milk = $5.25 per gallon

Skim goat milk = $4.50 per gallon

• The costs of purchasing the of unprocessed goat milk and processing it up to the splitoff point to yield a total of 104,000 gallons of saleable product was $192,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 45,500 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 $21 per gallon.

• Skim goat milk can be processed further to yield 56,700 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $6. The product can be sold for $13 per gallon.

There are no beginning and ending inventory balances.

Question 1: Using estimated net realizable value, what amount of the joint costs would be allocated Xyla and the skim goat ice cream? (Round intermediary percentage calculations to the nearest hundredth.)

a. $121,704 and $ 70,776

b. $682,500 and $396,900

c. $92,505 and $ 99, 975

d. $96, 240 and $96,240