Yakima Manufacturing purchases trees from Cheney Lumber and processes them up to

Question

Yakima Manufacturing purchases trees from Cheney 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 100( Yeild is 70,000 sheets of paper 60,000 pencil casing no scrap)
Production:
Pencil casings 70,000
Paper--------- 60,000

Sales:
Pencil casings 60000 at 0.10 per casing
Paper--------- 68,000 at 0.04 per page

The cost of purchasing 100 trees and processing them up to the splitoff point to yield 70,000 sheets of paper and 60,000 pencil casings is $3,000.

Yakima's Manufacturing's accounting department reported no beginning inventories and an ending inventory of 2,000 sheets of paper.

What are the paper's and the pencils' approximate weighted cost proportions using the sales value at splitoff method, respectively

Explanation / Answer

60,000 x 0.04=$2,400

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