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Gary Corporation produces products X, Y, and Z from a single raw material input. Budgeted data for the next month is as follows: Product X
Gary Corporation produces products X, Y, and Z from a single raw material input. Budgeted data for the next month is as follows:
Product X | Product Y | Product Z | ||||
Units produced | 2,000 | 2,500 | 3,500 | |||
Per unit sales value at split-off | $ | 18 | $ | 23 | $ | 20 |
Added processing costs per unit | $ | 1 | $ | 3 | $ | 3 |
Per unit sales value if processed further | $ | 24 | $ | 24 | $ | 29 |
|
If the cost of raw material input is $73,000, which of the products should be processed beyond the split-off point?
Product X | Product Y | Product Z | |
A) | yes | yes | no |
B) | yes | no | yes |
C) | no | yes | no |
D) | no | yes | yes |
|
Option B
Option C
Option D
Option A
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