Chem Manufacturing Company processes direct materials up to the split-off point where two products (X and Y) are obtained and sold. The following information was collected for the month of November:Direct materials processed:  10,200 gallons (10,200 gallons yield 9500 gallons of good product and 700 gallons of shrinkage)         Production:           X   5300 gallons                                    Y   4200 gallons        Sales:                  X   5050 at $300 per gallon                                    Y   3950 at $80 per gallon The cost of purchasing 10,200 gallons of direct materials and processing it up to the split-off point to yield a total of 9500 gallons of good products was $1,050,000.The beginning inventories totaled 35 gallons for X and 400 gallons for Y. Ending inventory amounts reflected 565 gallons of Product X and 1,515,000 gallons of Product Y. October costs per unit were the same as November. Using the physical-volume method, what is Product X's approximate gross-margin percentage? (Round all intermediary calculations two decimal places.)

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Asked Dec 3, 2019
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Chem Manufacturing Company processes direct materials up to the split-off point where two products (X and Y) are obtained and sold. The following information was collected for the month of November:

Direct materials processed:  10,200 gallons (10,200 gallons yield 9500 gallons of good product and 700 gallons of shrinkage)

 

        Production:           X   5300 gallons

                                    Y   4200 gallons

        Sales:                  X   5050 at $300 per gallon

                                    Y   3950 at $80 per gallon

 

The cost of purchasing 10,200 gallons of direct materials and processing it up to the split-off point to yield a total of 9500 gallons of good products was $1,050,000.

The beginning inventories totaled 35 gallons for X and 400 gallons for Y. Ending inventory amounts reflected 565 gallons of Product X and 1,515,000 gallons of Product Y. October costs per unit were the same as November.

 

Using the physical-volume method, what is Product X's approximate gross-margin percentage? (Round all intermediary calculations two decimal places.)

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Step 1

Calculate the amount of sales for Product X.

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Sales Number of gallons soldx Price per gallons 5,050x$300 per gallon -S1,515,000

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Step 2

Calculate the cost of goods sold for 5,300 gallons of product X.

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Total cost of goods sold Cost of goods sold (Producti on gallons for product X+ for 5,300 gallons Product Y Production gallons for product X S1,050,000 -x 5,300 5,300 4,200 -S585,789.47

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Step 3

Calculate the cost of goods sold for 5,050 ...

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Cost of goods sold for product X Cost of goods sold for 5,050=. x 5,050 gallons 5,300 gallons $585, 789.47 -x5,050 5,300 -S558,157.89

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