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Gary Company Produces Products X, Y, and Z from a Single

question 53

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Gary Company produces products X, Y, and Z from a single raw material input. Budgeted data for the next month is as follows:  product  X Y  Z Units produced. 2,5003,0004,000 Per unit sales value at split-off.£20.00£22.00£25.00Added processing costs per unit. £8.00£8.50£8.00Per unit sales value if processed further. £30.00£30.00£35.00\begin{array}{lrr}&&\text { product }\\& \text { X} & \text { Y } & \text { Z } \\ \text {Units produced. } &2,500& 3,000 & 4,000\\ \text { Per unit sales value at split-off.} & £ 20.00&£ 22.00&£ 25.00\\ \text {Added processing costs per unit. } &£ 8.00&£ 8.50& £ 8.00 \\ \text {Per unit sales value if processed further. } &£ 30.00 & £ 30.00 &£ 35.00\\\end{array}

If the cost of raw material input is £150,000, which of the products should be processed beyond the split-off point?
\quad \quad \quad  Product \text { Product }
XYZ\begin{array}{lrr}&&\\ &\text {X}&&\text {Y}&&\text {Z}\end{array}

A.  no  yes no \begin{array}{lrr} \text { no } & \text { yes }& \text {no } \\\end{array}
B. noyes  yes \begin{array}{lrr} \text {no} & &\text {yes } & \text { yes }\\\end{array}
C. yes  no yes \begin{array}{lrr} \text {yes } & \text { no }& \text {yes } \\\end{array}
D. yes  yes  no \begin{array}{lrr} \text {yes } & \text { yes }& \text { no }\\\end{array}

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