Cola Drink Company processes direct materials up to the splitoff point where two products, Aand B, are obtained. The following information was collected for the month of July:Direct materials processed: 2,500 liters (with 20% shrinkage)Production:A1,500 litersB500 liters$15.00 per liter$10.00 per literSales:AВThe cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff pointto yield a total of 2,000 liters of good products was $4,500. There were no inventory balancesof A and B.Product A may be processed further to yield 1,375 liters of Product Z5 for an additionalprocessing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginninginventory and ending inventory was 125 liters.Product B may be processed further to yield 375 liters of Product W3 for an additionalprocessing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginninginventory and ending inventory was 25 liters.5. When using sales value at splitoff point method, what is the approximate amount of jointcosts that will be allocated to Product A?A. $3,682B. $818C. $3,375D. $2,700

Name: Cola Drink Company processes direct materials up to the splitoff poin
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Description: Cola Drink Company processes direct materials up to the splitoff point where two products, Aand B, are obtained. The following information was collected for the month of July:Direct materials processed: 2,500 liters (with 20% shrinkage)Production:A1

Sales value at splitoff point method is the method in which joint cost is allocated to the product…

Business

Accounting

nd B, are obtained. The following information was collected for Direct materials processed: 2,500 liters (with 20% shrinkage) 1,500 liters Production: A B 500 liters Fales: $15.00 per liter $10.00 per liter A B 1 500 lit

nd B, are obtained. The following information was collected for Direct materials processed: 2,500 liters (with 20% shrinkage) 1,500 liters Production: A B 500 liters Fales: $15.00 per liter $10.00 per liter A B 1 500 lit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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