Hi,
I am trying to do homework for my university and there is one question that i just cant seem to get right.
I would really appriciate if somebody could help me solve this question and post how the calculations are done.
The information given in the questions are as follows:
Company produces direct material up to the split off point, where two products x and y are obtained.
Direct materials processed 2500 liters.
Production:
x = 1500 liters
y = 500 liters
Cost of purchasing 2500 liters of direct materials and processing up to split of point to yield a total of 2000 liters of good products was 10 000 €. There were no inventory balances of products X and Y.
X may be processed further to yield 1400 liters of X1 for an additional processing cost of 400 €. There was no beginnning inventory and the ending inventory was 125 liters.
Y may be processed further to yiled 400 liters of Y1 for an additional processing cost of 800 €. there was no beginning inventory and ending inventory was 25 liters.
The questions is: What is the companies business result if both x and y are further processed and the joint costs are allocated wit the value split of method?
The multiple choises given:
1. 33 950 €
2. 34 875 €
3. 36 725€
Thanks in advance !
I am trying to do homework for my university and there is one question that i just cant seem to get right.
I would really appriciate if somebody could help me solve this question and post how the calculations are done.
The information given in the questions are as follows:
Company produces direct material up to the split off point, where two products x and y are obtained.
Direct materials processed 2500 liters.
Production:
x = 1500 liters
y = 500 liters
Cost of purchasing 2500 liters of direct materials and processing up to split of point to yield a total of 2000 liters of good products was 10 000 €. There were no inventory balances of products X and Y.
X may be processed further to yield 1400 liters of X1 for an additional processing cost of 400 €. There was no beginnning inventory and the ending inventory was 125 liters.
Y may be processed further to yiled 400 liters of Y1 for an additional processing cost of 800 €. there was no beginning inventory and ending inventory was 25 liters.
The questions is: What is the companies business result if both x and y are further processed and the joint costs are allocated wit the value split of method?
The multiple choises given:
1. 33 950 €
2. 34 875 €
3. 36 725€
Thanks in advance !