If the sales value at splitoff method is used, what is the approximate production cost for each pencil casing? 1. O $0.0250 2. O $0.0255 3. O S0.0335 4. O S0.0357
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
![Ending inventory
2,000
Selling price
$0.04
$0.10
Question 2/ 25
If the sales value at splitoff method is used, what is the approximate production cost for each pencil casing?
1. O s0.0250
O S0.0255
O S0.0335
O s0.0357
2.
3.
4.
Question 3 / 25
What is the sales value at the splitoff point for paper?
1. O$240
2. O$2,320
O S2,400
4. OS3,900
3.
Question 4 / 25
If the sales value at splitoff method is used, what are the approximate joint costs assigned to ending inventory for
paper?
1. O$28.58
Os100.00
OS870.00
4 O$1,500.00
2.
3.
Question 5/ 25
What is the sales value at the splitoff point of the pencil casings?
1.
$600
O $2,460
S6 00
2.
922
Wa Q) ENG
1/20
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![00:59 : 2
XYZ Manufacturing purchases trees from ABC company and processes them up to the
split off point where two products (paper and pencil casings) are obtained. 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 November:
Joint Costs
Joint Costs (The cost of purchasing 100 trees
$3,000
and processing them up to the split off point
Paper
Pencil Casings
Beginning inventory
Production
60,000
60,000
Sales
58,000
60,000
Ending inventory
2,000
$0.04
$0.10
Selling price
ril casings?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0db9cb7-07df-4e09-85de-ebd0b5d71d3e%2Fcba35b0d-dbc1-4db5-ba54-e44be2448651%2Fai1d029_processed.jpeg&w=3840&q=75)
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