Question 3

Jeffrey's Bottling Co. incurred the following costs during November:

Conversion costs	$	_______
Prime costs		257,500
Manufacturing overhead		205,000

If direct materials cost was $162,500 in November, what was the conversion cost for November?

Multiple Choice

• $300,000

• $285,000

• $260,000

• $280,000

Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales values of the products at the split-off point. Additional information is as follows:

	X		Y		Z		Total
Units produced		24,000		20,000		16,000		60,000
Allocated joint costs	$	350,000	$	189,000	$	161,000	$	700,000
Sales value at split-off		?		270,000		230,000		1,000,000
Additional costs for further processing		68,000		60,000		42,000		170,000
Sales value if processed further		505,000		382,000		364,000		1,251,000

Based solely on a relevant cost analysis, which of the three products should be processed by Walman beyond the split-off point?

Multiple Choice

• Only X

• Only Y

• Only Z

• Only Y and Z

• All three products: X,Y and Z