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Bismite Corporation purchases trees from Cheney lumber and processes them up to the splitminusoff point where two products (paper and pencil casings) emerge from the process. 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: 250 trees
Production: paper 180,000 sheets
pencil casings 180,000
Sales: paper 174,000 at $0.12 per page
pencil casings 178,500 at $0.15 per casing
The cost of purchasing 250 trees and processing them up to the splitoff point to yield 500,000 sheets of paper and 250,000 pencil casings is $20,000. Bismite's accounting department reported no beginning inventory.
a. What is the total sales value at the splitoff point for paper?
b. What is the total sales value at the splitoff point of the pencil casings?
c. If the sales value at splitoff method is used, what is the approximate production cost for each pencil casing?
d. If the sales value at splitoff method is used, what is the approximate production cost for each paper sheet?
e. If the sales value at splitoff method is used, what are the approximate joint costs assigned to ending inventory for paper?
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Bismite Corporation purchases trees from Cheney lumber and processes them up to the splitminusoff po...
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