Gary Corporation produces products X, Y, and Z from a single raw material input.
ID: 2597059 • Letter: G
Question
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
$20.00
$22.00
$25.00
Added processing costs per unit
$8.00
$8.50
$8.00
Per unit sales value if processed further
$30.00
$30.00
$35.00
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
Option A
Option B
Option C
Option D
Product X
Product Y
Product Z
Units produced
2,500
3,000
4,000
Per unit sales value at split-off
$20.00
$22.00
$25.00
Added processing costs per unit
$8.00
$8.50
$8.00
Per unit sales value if processed further
$30.00
$30.00
$35.00
Explanation / Answer
Answer
Option C - Product X Product Y Product Z
Yes No Yes
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