Refer to the information in Problem P11-44.

After the joint process, the skim milk and cream were separately processed at costs, respectively, of \(\$ 67,660\) and \(\$ 83,310\). Of the products produced, Powisett Farms Dairy sold \(1,550,000\) gallons of skim milk for \(\$ 1,472,500\) and 274,000 gatlons of cream for \(\$ 282,220\) to wholesalers.

a. Calculate the sales price per gallon for skim milk and cream.

b. Using relative sales value, allocate the joint cost to the joint production.

c. Calculate ending Finished Goods Inventory cost, Cost of Goods Sold, and the gross margin for the month.

Data From Problem P11-44:-

Dairy began operations at the start of May. Powisett Farms operates a fleet of trucks to gather whole milk from local farmers. The whole milk is then separated into two joint products: skim milk and cream. Both products are sold at the split-off point to dairy wholesalers. For May, the firm incurred the following joint costs:

During May, the firm processed 2,000,000 gallons of whole milk, producing \(1,555,500\) gallons of skim milk and 274,500 gallons of cream. The remaining gallons of the whole milk were lost during processing. There was no Raw Material or Work in Process Inventory at the end of May.

Transcribed Image Text:

Whole milk purchase cost. $400,000 Direct labor costs 180,000 Overhead costs 292,000 Total product cost. $872,000