Question
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 2,400 2,900 3,900 Per unit sales value at split-off $ 19 $ 21 $ 24 Added processing costs per unit $ 3 $ 5 $ 5 Per unit sales value if processed further $ 25 $ 25 $ 30
If the cost of raw material input is $87,000, 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 D
Option C
Option A
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