LanaTech Produces Three Products, X, Y, and Z, from Recycled

question 50

Short Answer

LanaTech produces three products, X, Y, and Z, from recycled paper.Budgeted data for next month follows: $\begin{array}{lrrr}&X&Y&Z\\\text { Units produced }&800&2,400&1,600\\\hline \text { Sales value at split-off per unit } & \$ 6 & \$ 15 & \$ 12 \\\text { Additional processing costs per unit } & \$ 1 & \$ 4 & \$ 5 \\\text { Joint production costs per unit } & \$ 2 & \$ 6 & \$ 4 \\\text { Sales value if processed further per unit } & \$ 9 & \$ 20 & \$ 16\end{array}$ The joint cost of the recycled paper is $110,000.Which of the products should be produced beyond the split-off point? $\quad\underline{X} \quad\quad \underline{Y} \quad\quad \underline{Z}$
A. $\text { No } \quad \text { Yes } \quad \text { Yes }$
B. $\text { Yes } \quad \text { Yes\quad No }$
C. $\text { No } \quad \text { No } \quad \text { No }$
D. $\text { No \quad Yes \quad No }$

---

Definitions:

Balance Sheet

A financial statement that presents a company’s financial position, showing assets, liabilities, and equity at a specific point in time.

Bookkeeper

A person responsible for recording the financial transactions and maintaining the financial records of a business.

Basic Accounting Equation

An equation representing the relationship between a company's assets, liabilities, and shareholders' equity (Assets = Liabilities + Equity).

Transactions

Any business activity that involves the exchange of goods, services, or money between two or more parties.