Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

Direct materials processed: 2,500 liters (with 20% shrinkage)

Production: A 1,500 liters

B 500 liters

Sales: A $15.00 per liter

B $10.00 per liter

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.

10) 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

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

Quality Auditor Guide Theory And Application Made Easy

Authors: Warren Alford

1st Edition

1453899774, 978-1453899779

More Books

Students also viewed these Accounting questions

Question

What is trade promotion? What are its objectives?

Answered: 1 week ago

Question

Define the terms critical path, ES, and LF.

Answered: 1 week ago

Question

7. Provide appropriate remediation when students fail.

Answered: 1 week ago