Task: THE FOLLOWING INFORMATION APPLIES TO QUESTION
Yakima Manufacturing Company, Inc. purchases trees from Cascade Lumber and processes them up to the split-off point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of February.
Trees Processed:
50 Trees (Yield is 30,000 sheets of paper and 30,000 pencil casings; no scraps).
Production:
Paper 30,000 Sheets
Pencil Casings 30,000 Casings
Sales:
Paper 29,000 @ $0.04 per page
Pencil Casings 30,000 @ $0.10 per casing
Cost of purchasing 50 trees and processing them up to the split-off point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.
Yakima's accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.
Q1. What is the sales value at split-off point for paper?
a $120
b $1,160
c $1,200
d $1,950
Q2. What is the sales value at split-off point for pencil casings?
a $300
b $1,480
c $3,000
d $3,750
Q3. If the sales value at split-off point method is used, what are the approximate joint costs assigned to ending inventory for paper?
a $14.29
b $50.00
c $435.00
d $750.00
Q4. If the sales value at split-off point method is used, what is the approximate production costs for each pencil casing?
a $0.0250
b $0.0255
c $0.0335
d $0.0357