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.
What are the paper's and the pencils' approximate weighted cost proportions using the sales value at splitoff method,respectively?
Definitions:
Statement of Income
A financial document outlining a company's revenues, expenses, and net income over a specific period.
Changes in Equity
Adjustments in the value of a company's shareholders' equity over a period due to investments, distributions, and earnings.
Net Income
The net income of a company, which is the amount left over from revenue after deducting all costs and taxes.
Service Revenues
Income earned from providing services as opposed to selling physical goods.
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