Answer the Following Questions Using the Information Below:
Bismite Corporation

question 30

Multiple Choice

Answer the following questions using the information below:
Bismite Corporation 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 October:
$\begin{array}{lll}\text { Trees processed: } & 250 \text { trees } & \\\text { Production: } & \text { paper } & 180,000 \text { sheets } \\& \text { pencil casings } & 180,000 \\\text { Sales: } & \text { paper } & 174,000 \text { at } \$ 0.12 \text { per page } \\& \text { pencil casings } & 178,500 \text { at } \$ 0.15 \text { per casing }\end{array}$ The cost of purchasing 250 trees and processing them up to the splitoff point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500.
Bismite's accounting department reported no beginning inventory.
-If the sales value at splitoff method is used,what is the approximate production cost for each pencil casing?

• A) $0.309
• B) $0.301
• C) $0.031
• D) $0.039

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Definitions:

Suspicious Financial Transactions

Financial activities that might suggest money laundering, fraud, or other illegal conduct, often monitored for regulatory compliance and crime prevention.

Registration Statement

The legal document filed with the securities commission detailing a corporation's securities offering to the public.

Omission

The act of leaving something out or not including something.

General Practitioner

A medical doctor who does not specialize in one particular area of medicine and provides general health care to people of all ages.