Solution-What are the expected sales values of production

What are the expected sales values of production

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Reference no: EM132948731

Question - Beverage Drink Company processes direct materials up to the split off point where two products, A and B, are obtained. The following information was collected for the month of July

Direct materials processed: 2,500 liters (with 20% shrinkage)

Production: A 1,500 liters ; B 500 liters

Sales: A P15.00 per liter ; B P10.00 per liter

The cost of purchasing 2,500 liters of direct materials and processing it up to the split off point to yield a total of 2,000 liters of good products was P4,500. There were no inventory balances of A and B.

Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of P150. Product Z5 is sold for P25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.

Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of P275. Product W3 is sold for P30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.

If Product Z5 and Product W3 are produced, what are the expected sales values of production, respectively?

Reference no: EM132948731

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What are the expected sales values of production

Reference no: EM132948731

Reference no: EM132948731

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