Beverage Drink Company Processes Direct Materials Up to the Split-Off

question 25

Multiple Choice

Beverage Drink Company processes direct materials up to the split-off point where two products, A and B, are obtained. The following information was collected for the month of July:

The cost of purchasing 3000 liters of direct materials and processing it up to the split-off point to yield a total of 2550 liters of good products was $7500. There were no inventory balances of A and B.
Product A may be processed further to yield 500 liters of Product Z5 for an additional processing cost of $170. Product Z5 is sold for $25 per liter. There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 1875 liters of Product W3 for an additional processing cost of $325. Product W3 is sold for $35 per liter. There was no beginning inventory and ending inventory was 25 liters.
If Product Z5 and Product W3 are produced, what are the expected sales values of production, respectively?

• A) $65,625 and $12,500
• B) $21,000 and $58,500
• C) $17,500 and $46,875
• D) $12,500 and $65,625

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