XYZ 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: 84,000 gallons (after shrinkage)
Production: Condensed goat milk 36,500 gallons
Skim goat milk 46,500 gallons
Sales: Condensed goat milk $6.00 per gallon
Skim goat milk $5.00 per gallon
The costs of processing unprocessed goat milk to the split-off point to yield a total of 83,000 gallons of saleable products was $150,000. There were no inventory balances of either product.
Condensed goat milk may be processed further to yield 36,000 gallons of a medicinal milk product, Xyla, for an additional processing cost of $3 per usable gallon. Xyla can be sold for $15 per gallon. Skim goat milk can be processed further to yield 45,000 gallons of skim goat ice cream, for an additional processing cost per usable gallon of $3. The product can be sold for $7 per gallon. There are no beginning and ending inventory balances.
How much of the $72240 joint cost are allocated to the condensed goat milk using the net realizable values?