Yakima Manufacturing Purchases Trees from Cheney Lumber and Processes Them

question 46

Multiple Choice

Yakima 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.
Yakima's Manufacturing's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.
What are the paper's and the pencils' approximate weighted cost proportions using the sales value at splitoff method, respectively?

• A)50.00% and 50.00%
• B)33.33% and 66.67%
• C)31.82% and 68.18%
• D)None of these answers is correct.

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Definitions:

Budgeting Formulas

Mathematical expressions or rules used to plan and control income and expenditure, aiding in the preparation and implementation of budgets.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor.

Units

Basic quantifiable measures used to determine or express the amount of a product or service.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity level.