Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

Trees processed: 250 trees
Production: paper 180,000 sheets
pencil casings 180,000
Sales: paper 174,000 at $0.12 per page
pencil casings 178,500 at $0.15 per casing

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?

$0.309

$0.039

$0.301

$0.031

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Reporting In A Competitive Economy (RLE Accounting)

Authors: Herman W. Bevis

1st Edition

1138966819, 9781138966819

More Books

Students also viewed these Accounting questions

Question

Discuss the various types of policies ?

Answered: 1 week ago

Question

Briefly explain the various types of leadership ?

Answered: 1 week ago

Question

Explain the need for and importance of co-ordination?

Answered: 1 week ago

Question

Explain the contribution of Peter F. Drucker to Management .

Answered: 1 week ago