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

question 21

Multiple Choice

Use the information below to answer the following question(s) .Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y) are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
-What is product Y's approximate joint production cost if the sales value at splitoff point method is used?

• A)$365,625
• B)$419,250
• C)$458,250
• D)$600,000
• E)$609,375

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Definitions:

Unlevered Cost

The cost of capital or investment returns without the impact of borrowing or leveraging financial leverage.

Annual Coupon

The yearly interest payment paid to bondholders, typically based on a percentage of the bond's face value.

Expected EBIT

The projected Earnings Before Interest and Taxes, an estimate of a company's profit excluding interest and income tax expenses.

Book Value

The net value of a company's assets minus its liabilities and preferred stock, representing the value of the company according to its financial statements.