Question

Bismite Corporation purchases trees from Cheney Lumber and processes them up to the splitoff point where two products (paper

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Answer #1

1) Total sales value at the splitoff point for paper= Papers produced*Selling price per page

= 180000*$0.12= $21600

2) Ending inventory of Paper= 180000-174000= 6000

Paper= 180000*$0.12= $21600

Pencil casings= 180000*$0.15= $27000

Total= $21600+27000= $48600

Weighted average proportion of Paper= $21600*100/48600= 44.44%

Joint costs assigned to ending inventory for Paper= (Cost of purchasing*Ending inventory of Paper*Weighted average proportion of Paper)/Total units produced of Paper

= $(12500*6000*44.44%)/180000

= $185.17

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