Question
Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the split-offpoint, where two products(paper and pencilcasings) are obtained. The products are then
Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the split-offpoint, where two products(paper and pencilcasings) 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.
Treesprocessed:
50 trees(yield is30,000 sheets of paper and30,000 pencil casings and noscrap)
Production:
Paper: 30,000 sheets
Pencil casings: 30,000
Sales:
Paper: 29,000 at$0.04 per page
Pencil casings: 30,000 at$0.10 per casing
The cost of purchasing 50 trees and processing them up to the splitoff point to yield30,000 sheets of paper and30,000 pencil casings is$1,500.
RaynorManufacturing's accounting department reported no beginninginventories; however, ending inventory amounts reflected1,000 sheets of paper in stock.
What are thepaper's and thepencil's approximate weighted cost proportions using the sales value at split-offmethod, respectively?
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