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

question 166

Multiple Choice

Use the information below to answer the following question(s) :
Yip Manufacturing purchases trees from Cheney Lumber 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 May:
The cost of purchasing 100 trees and processing them up to the splitoff point to yield 70,000 sheets of paper and 60,000 pencil casings is $3,000.Yip's Manufacturing's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.
-If the sales value at splitoff method is used, what is the approximate production cost for each pencil casing?

• A)$0.0398
• B)$0.0299
• C)$0.05
• D)$0.0419
• E)$0.0341

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