Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. 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 October: Trees processed: 320 trees Production: paper 180,000 sheets pencil casings 180,000 Sales: paper 169,000 at $0.10 per page pencil casings 177,500 at $0.13 per casing The cost of purchasing 320 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $13,000. Bismite's accounting department reported no beginning inventory. What are the paper's and the pencil's approximate weighted cost proportions using the sales value at split-off method, respectively?
Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. 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 October: Trees processed: 320 trees Production: paper 180,000 sheets pencil casings 180,000 Sales: paper 169,000 at $0.10 per page pencil casings 177,500 at $0.13 per casing The cost of purchasing 320 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $13,000. Bismite's accounting department reported no beginning inventory. What are the paper's and the pencil's approximate weighted cost proportions using the sales value at split-off method, respectively?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 12E: Adirondack Bat Co. processes rough timber to obtain three grades of lumber, A, B, and C that are...
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Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. 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 October:
Trees processed:
320 trees
Production:
paper 180,000 sheets
pencil casings 180,000
Sales:
paper 169,000 at $0.10 per page
pencil casings 177,500 at $0.13 per casing
The cost of purchasing 320 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $13,000.
Bismite's accounting department reported no beginning inventory.
What are the paper's and the pencil's approximate weighted cost proportions using the sales value at split-off method, respectively?
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