Posted: April 26th, 2016

Skim goat milk can be processed further to yield 56,200 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $2.50. The product can be sold for $9 per gallon.

There are no beginning and ending inventory balances.

1.) What is the estimated net realizable value of Xyla at the splitoff point?

A) $365,300

B) $505,800

C) $585,000

D) $702,000

2) What is the estimated net realizable value of the skim goat ice cream at the splitoff point?

A) $365,300

B) $505,800

C) $220,400

D) $170,900

3) Using estimated net realizable value, what amount of the joint costs would be allocated to Xyla and to the skim goat ice cream?

A) $83,942 and $60,538

B) $88,942 and $55,538

C) $65,592 and $78,888

D) $144,480 and $72,140

4) Using the sales value at splitoff method, what is the gross-margin percentage for condensed goat milk at the splitoff point?

A) 21.1%

B) 55.1%

C) 58.1%

D) 38.2%

5) Using the sales value at splitoff method, what is the gross-margin percentage for skim goat milk at the splitoff point?

A) 21.1%

B) 55.1%

C) 58.1%

D) 38.2%

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