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 processing it up to the split-off point to yield a total of 27,500 gallons of saleable product was $53,000.

The company uses constant gross-margin percentage NRV method to allocate the joint costs of production. What is the allocated joint costs of Butter Cream? (Round intermediary percentages to the nearest hundredth.)

Select one:

a. $33,580

b. $13,000

c. $35,600

d. $19,428

Solutions

Expert Solution

	The correct option is (d) i.e. $19,428 which is calculated as below:-

		Butter Milk	Condensed milk	Total
	Sales value (12,500*4.5)	56,250	120,000	176,250
Note 1	Gross margin @42.35%	23,822
	Total production costs	32,428
	Separable costs	13,000
	Joint costs allocated	19,428

Note 1	Gross margin percentage = (176,250-53,000-35,600-13,000)/176,250 = 42.35%

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

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

1. 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: 24,500 gallons (after shrinkage) Production: Butter Cream 12,000 gallons Condensed Milk 12,500 gallons Sales: Butter Cream 11,500 gallons Condensed Milk 12,000 gallons Sales Price: Butter Cream $3.50 per gallon Condensed Milk $7.50 per gallon Separable costs in total: Butter Cream $14,000 Condensed Milk $34,700 The cost of purchasing the of unprocessed...

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

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 Production: Butter Cream 12,500 gallons Condensed Milk 15,500 gallons Sales: Butter Cream 12,000 gallons Condensed Milk 15,000 gallons Sales: Butter Cream $2.5 per gallon Condensed Milk $5.5 per gallon The costs of purchasing the of unprocessed milk and processing it up to the splitoff point to yield a total of...

The Morton Company processes unprocessed goat milk up to the splitoff point where two products, condensed...

The Morton 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: 65,000 gallons Production: condensed goat milk 26,100 gallons skim goat milk 32,400 gallons Sales: condensed goat milk $3.50 per gallon skim goat milk $2.50 per gallon The costs of purchasing the 65,000 gallons of unprocessed goat milk and processing it up to the splitoff...

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending...

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $226,200. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Blending Department Whole milk 250 740 Skim milk 270 670 Cream 210 270 730 1,680 Packing Department Whole milk 330 460 Skim milk 530 570 Cream 150 190 1,010 1,220...

terry Company manufactures and sells yogurt-based products. Terry purchases milk products and processes them into Traditional...

terry Company manufactures and sells yogurt-based products. Terry purchases milk products and processes them into Traditional yogurt, Greek yogurt, and Drinkable yogurt. Terry’s production process involves first fermenting the milk into yogurt; all yogurt products go through this process, regardless of what end-product is to be made. For the last month, the joint costs of processing the milk into yogurt were $450,000. There was no beginning or ending inventories for the month. Production and sales value information for the month...

IcyPop Inc. is an ice cream manufacturing company. It produces two major types of ice-cream products:...

IcyPop Inc. is an ice cream manufacturing company. It produces two major types of ice-cream products: FruityGo and BerryWafers. You have been brought on as an Analyst, with your first task being to ascertain the most appropriate method of assigning overhead costs to its FruityGo and BerryWafers products. The following information relates to these products for the year just ended for its two main production departments. Mixing Packaging Budgeted Overhead $400,000 $80,000 Budgeted Direct Labour Hours: FruityGo 1,000 5,000 BerryWafers...

It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate...

It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk-chocolate liquor base. These two intermediate products become separately identifiable at a single splitoff point. Every 900 pounds of cocoa beans yields 30 gallons of chocolate-powder liquor base and 120 gallons of milk-chocolate liquor base. The chocolate-powder liquor base is further processed into chocolate powder. Every 30 gallons of chocolate-powder liquor base yield 670 pounds of chocolate powder. The milk-chocolate liquor base is further processed...

Production planning is the systematic and strategic design of production processes that can produce products and...

Production planning is the systematic and strategic design of production processes that can produce products and deliver services quickly, precisely, and efficiency that achieve a set of common objectives. The principle objective of this process is to stay competitive. A successful process design has to take into account the appropriateness of the process to overall organization objective. Process design requires a broad view of the whole organization and should not have a myopic outlook. And the process should deliver customer...

Daston Company manufactures two products, Product F and ProductG. The company expects to produce and...

Daston Company manufactures two products, Product F and Product G. The company expects to produce and sell 1,470 units of Product F and 2,560 units of Product G during the current year. Data relating to the company’s three activity cost pools are given below for the current year:Total ActivityActivity Cost PoolsTotal CostProduct FProduct GTotalMachine setups$33,440166setups186setups352setupsPurchase orders$191,250580orders1,970orders2,550ordersOrder size$132,4303,220hours3,750hours6,970hoursRequired:Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.)

Consider two countries, Green (Home) and Purple (Foreign), which produce butter and jam. There is only...

Consider two countries, Green (Home) and Purple (Foreign), which produce butter and jam. There is only one factor of production (labor). In order to produce a pound of butter, a Home worker needs 5 hours, while a Foreign worker needs 4 hours. In order to produce a pound of jam, a Home worker needs 4 hours, while a Foreign worker needs 3 hours. Markets are perfectly competitive. Labor endowments are equal across countries: L = L* = 3300 hours a)...

Subjects