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

question 26

Multiple Choice

Use the information below to answer the following question(s) .Beverage Drink Company processes direct materials up to the splitoff point, where two products, A and B, are obtained.The following information was collected for the month of July:
Direct materials processed: 2,500 litres (with 20 percent shrinkage)
Cost of purchasing 2,500 litres of direct materials and processing it up to the splitoff point to yield a total of 2,000 litres of good products was $4,500.There were no inventory balances of A and B.Product A may be processed further to yield 1,375 litres of Product Z5 for an additional processing cost of $150.Product Z5 is sold for $25.00 per litre.There was no beginning inventory and ending inventory was 125 litres.Product B may be processed further to yield 375 litres of Product W3 for an additional processing cost of $275.Product W3 is sold for $30.00 per litre.There was no beginning inventory and ending inventory was 25 litres.
-What are the expected final sales values of production if Product Z5 and Product W3 are produced?

• A)$11,250 and $34,375
• B)$22,500 and $5,000
• C)$31,250 and $10,500
• D)$34,375 and $10,500
• E)$34,375 and $11,250

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Definitions:

Federal Unemployment Tax Rate

The rate at which employers are taxed by the federal government to fund the unemployment benefit programs.

Current Liabilities

Current Liabilities are a company's debts or obligations that are due to be paid within one year and are listed on the company’s balance sheet. They typically include accounts payable, short-term loans, and other accrued liabilities.

Principal Repaid

The amount of loan or debt's original borrowing that has been or is being paid back, excluding interest payments.

Long-Term Notes

Debt securities or loans with maturities extending beyond one year, typically used for long-term financing needs.