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THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 50 THROUGH 53:Yakima Manufacturing purchases trees from Cascade Lumber and processes them up tothe splitoff point where two products (paper and pencil casings) are obtained. Theproducts are then sold to an independent company that markets and distributes them toretail outlets. The following information was collected for the month of November:Trees processed:50 trees (yield is 30,000 sheets of paper and 30,000 pencilcasings and no scrap)Production:paper30,000 sheetspencil casings30,000Sales:paper29,000 at $0.04 per pagepencil casings30,000 at $0.10 per casingThe cost of purchasing 50 trees and processing them up to the splitoff point to yield30,000 sheets of paper and 30,000 pencil casings is $1,500.Yakima’s accounting department reported no beginning inventories and an endinginventory of 1,000 sheets of paper.50.What is the sales value at the splitoff point for paper?a.$120b.$1,160c.$1,200d.$1,950Answer:cDifficulty:2Objective:4Terms to Learn:sales value at splitoff method, splitoff point
Paper: 30,000 sheets x $0.04 = $1,200.0016-10
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51.What is the sales value at the splitoff point of the pencil casings?
52.If the sales value at splitoff method is used, what are the approximate joint costsassigned toending inventoryfor paper?Difficulty:3Objective:4
Terms to Learn:sales value at splitoff method, splitoff point$1,200/($1,200 + $3,000) = 28.57%28.57% x $1,500 x 1,000/30,000 = $14.29(see calculation of answer to question 50)53.If the sales value at splitoff method is used, what is the approximate production costforeachpencil casing?(see calculation of answer to question 50)
16-11
54.Yakima Manufacturing purchases trees from Cascade Lumber and processes themup to the splitoff point where two products (paper and pencil casings) are obtained.The products are then sold to an independent company that markets and distributesthem to retail outlets. The following information was collected for the month ofMay:Trees processed:50 trees (yield is 35,000 sheets of paper and 30,000 pencilcasings and no scrap)Production:paper35,000 sheetspencil casings30,000Sales:paper34,000 at $0.04 per pagepencil casings30,000 at $0.10 per casingThe cost of purchasing 50 trees and processing them up to the splitoff point to yield35,000 sheets of paper and 30,000 pencil casings is $1,500.Yakima's Manufacturing's accounting department reported no beginning inventoriesand an ending inventory of 1,000 sheets of paper.What are the paper's and the pencils' approximate weighted cost proportions usingthe sales value at splitoff method, respectively?a.50.00% and 50.00%b.33.33% and 66.67%c.31.82% and 68.18%d.None of these answers is correct.Answer:cDifficulty:2Objective:4
Terms to Learn:sales value at splitoff method, splitoff point(35,000 x $0.04) + (30,000 x $0.10) = $4,400$1,400/$4,400 = 31.82%$3,000/$4,400 = 68.18%16-12

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Term
Winter
Professor
N/A
Tags
Accounting, Revenue, joint costs, sales value, Splitoff Point
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Accounting
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Chapter 7 / Exercise EX7-4
Accounting
Reeve/Warren
Expert Verified

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