Chem Manufacturing Company Processes Direct Materials Up to the Split-Off

question 60

Multiple Choice

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)

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.)

• A) 63%
• B) 56%
• C) 171%
• D) 68%

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Definitions:

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