Question: Use the following information for Problems 6 & 7 . The Green Company processes unprocessed goat milk up to the split - off point where

Use the following information for Problems 6&7.
The Green Company processes unprocessed goat milk up to the split-off point where two
products, condensed goat milk and skim goat milk result. The following information was
collected for the month of October:
The costs of purchasing the of unprocessed goat milk and processing it up to the split-off point to
yield a total of 102,500 gallons of saleable product was $189,480. There were no inventory
balances of either product. Condensed goat milk may be processed further to yield 44,500
gallons (the remainder is shrinkage) of a medicinal milk product, Xula, for an additional
processing cost of $6 per usable gallon. Xxla can be sold for $22 per gallon.
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 $6. The product can be sold for $14 per gallon.
There are no beginning and ending inventory balances.
How much (if any) extra income would Green earn if it produced and sold all of the Xxla from
the condensed goat milk? Allocate joint processing costs based upon relative sales value on the
split-off. (Extra income means income in excess of what Green would have earned from selling
condensed goat milk.)(Round intermediary percentages to the nearest hundredth.)
$554,500
How much (if any) extra income would Green earn if it produced and sold all of the skim goat
ice cream from the skim goat milk? Allocate joint processing costs based upon relative sales
value on the split-off. (Round intermediary percentages to the nearest hundredth.)
I do not understand the explanation, please go into more depth
Use the following information for Problems 6 & 7

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