Use the Information Below to Answer the Following Question(s)

question 190

Multiple Choice

Use the information below to answer the following question(s) .Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the splitoff point, where two products (paper and pencil casings) are obtained.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:
50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)
Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock.
-What is the approximate production cost per unit for each pencil casing if the sales value at splitoff method is used?

• A)$0.0250
• B)$0.0255
• C)$0.0335
• D)$0.0357
• E)$0.0533

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Definitions:

Return On Excess Cash

A measure of how effectively a company is using its idle cash, beyond what is needed for its immediate operating needs, to generate returns.

Sustain Stock Price

Efforts or strategies employed by a company to maintain or increase the market value of its shares over time.

Gaining Control

The process of acquiring the ability to direct the affairs of an entity, often through ownership of a majority of its voting shares.

Business Relationships

The networks and connections a company maintains with its partners, suppliers, customers, and stakeholders to support its operations and growth.