Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the split off point, where two products (paper and pencil casings) are obtained.

Raynor Manufacturing purchases trees from Tree Nursery and processes them up to the split off point, where two products (paper and pencil casings) 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. Trees processed: 50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)

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

Cost of purchasing 50 trees and processing them up to the split off point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500. Raynor Manufacturing's accounting department reported no beginning inventories; however, ending inventory amounts reflected 1,000 sheets of paper in stock. QUESTION: What are the approximate joint costs assigned to the paper ending inventory if joint costs are allocated using the sales value at split off method?

A)

$435.00

B)

$428.55

C)

$50.00

D)

$750.00

E)

$14.29

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_2

Step: 3

blur-text-image_3

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

Skills For Accounting And Auditing Research

Authors: Shelby Collins

2nd Edition

1618530747, 9781618530745

More Books

Students also viewed these Accounting questions