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Yakima Manufacturing Sales value split-off joint costs

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12. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 12 THROUGH 15. Yakima Manufacturing Company, Inc. purchases trees from Cascade Lumber 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 February.
Trees Processed:

50 Trees (Yield is 30,000 sheets of paper and 30,000 pencil casings; no scraps).

Production:

Paper 30,000 Sheets

Pencil Casings 30,000 Casings

Sales:

Paper 29,000 @ $0.04 per page

Pencil Casings 30,000 @ $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.

Yakima's accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.

What is the sales value at split-off point for paper?

a $120
b $1,160
c $1,200
d $1,950

13. What is the sales value at split-off point for pencil casings?

a $300
b $1,480
c $3,000
d $3,750

14. If the sales value at split-off point method is used, what are the approximate joint costs assigned to ending inventory for paper?

a $14.29
b $50.00
c $435.00
d $750.00

15. If the sales value at split-off point method is used, what is the approximate production costs for each pencil casing?

a $0.0250
b $0.0255
c $0.0335
d $0.0357

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Your tutorial shows computations and gives instructional steps to assist you in learning how to approach these problems.

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12. What is the sales value at split-off point for paper?   

Paper: 30,000 sheets x $0.04 = $1,200.00 Pick C

Just use sales price x production

13. What is the sales value at split-off point for pencil casings?

Pencils: 30,000 casings x $0.10 = $3,000.00 Pick C     

Just use sales ...

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  • MSc, University of Virginia
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