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The Green Company processes unprocessed goat milk up to the split - off point where...

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Accounting

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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: Direct materials processed: Production: Condensed goat milk Skim goat milk Sales: Condensed goat milk Skim goat milk 105,000 gallons (after shrinkage) 46,000 gallons 59,000 gallons $4.00 per gallon $3.50 per gallon The costs of purchasing the of unprocessed goat milk and processing it up to the split - off point to yield a total of 105,000 gallons of saleable product was $184,480. There were no inventory balances of either product. Condensed goat milk may be processed further to yield 45,500 gallons (the remainder is shrinkage) of a medicinal milk product, Xyla, for an additional processing cost of $7 per usable gallon. Xyla can be sold for $22 per gallon. Skim goat milk can be processed further to yield 57,700 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $7. The product can be sold for $12 per gallon. There are no beginning and ending inventory balances. What is the estimated net realizable value of Xyla at the split off point? A. $690,000 B. $288,500 C. $682,500 D. $295,000

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