(Solution Document) Gary Corporation produces products X, Y, and Z from a single raw material input. Budgeted data for the next month is as follows:


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   2,400   2,900   3,900 Per unit sales value at split-off $ 19 $ 21 $ 24 Added processing costs per unit $ 3 $ 5 $ 5 Per unit sales value if processed further $ 25 $ 25 $ 30

 

If the cost of raw material input is $87,000, which of the products should be processed beyond the split-off point?

 

  Product X Product Y Product Z A) yes yes no B) yes no yes C) no yes no D) no yes yes

Option B

Option D

Option C

Option A

 







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