What is the sales value at the splitoff point of the pencil casings

ACCOUNTING

Multiple Choice

Yakima Manufacturing purchases trees from Cascade Lumber and processes them up to the splitoff 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:


Trees processed: 50 trees (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap)



Production: paper 30,000 sheets

pencil casings 30,000



Sales: paper 29,000 at $0.04 per page

pencil casings 30,000 at $0.10 per casing


Cost of purchasing 50 trees and processing them up to the splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is $1,500.



Yakima’s accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper.


What is the sales value at the splitoff point of the pencil casings?

a. $300

b. $1,480

c. $3,000

d. $3,750

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