Reference no: EM132468953

Gary Corporation produces products X, Y and Z from a single raw material input. Budgeted data for the next month is as follows:

                                                       Product X         Product Y             Product Z

Units produced                                        2,500              3,000               4,000

Per unit Sales Value at split off                    $20                $22                   $25

Added processing costs per unit                  $8                  $8.50              $8

Per unit sales value if process further           $30                   $30                $35

Question 1: If the cost of raw material input is $150,000, which of the products should be processed beyond the split off point?

                    Product X            Product Y          Product Z

A                          no               yes                  no

B                          no              yes                    yes

C                        yes             no                      yes

D                        yes             yes                       no