Cola Drink Company Processes Direct Materials Up to the Splitoff

question 104

Multiple Choice

Cola 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: The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters 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 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.
What is Product Z5's estimated net realizable value at the splitoff point?

• A)$11,100
• B)$22,350
• C)$34,225
• D)$34,375

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Definitions:

Social Identification

The process by which individuals define themselves in relation to groups, adopting the values and norms of the group.

Transformational Behavior

Actions that inspire and motivate followers to exceed expectations by fostering significant changes.

Contingent Reward

A form of motivation in which the reward is given based on achieving a predefined outcome or performance level.

Bass

Refers to Bernard M. Bass, a prominent researcher in the field of leadership, known for his work on transformational leadership.