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The Alfarm Corporation processes raw milk up to the splitoff point where two products, cream...

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Accounting

The Alfarm Corporation processes raw milk up to the splitoff point where two products, cream and liquid skim, are produced and sold. There was no beginning inventory. The following material was collected for the month of February:

Direct materials processed: 810,000 gallons 787,500 gallons of good product)

Production: Cream 443,500 gallons

Liquid skim 344,000 gallons

Sales: Cream 423,500 at $150 per gallon

Liquid skim 334,000 at $135 per gallon

The cost of purchasing 810,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 787,500 gallons of good product was $2,310,000. What are the physicalvolume proportions to allocate joint costs for cream and liquid skim, respectively?

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A. 50.00% and 50.00% B. 53.78% and 46.22% C. 54.75% and 45.25% D. 56.32% and 43.68%

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