Beverage Drink Company processes direct materials up to the splitoff point where two products, A and 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 liters
B500 liters
Sales:A$15.00 per liter
B$10.00 per liter
The cost of purchasing 2,500 liters of direct materials and processing it up to the splitoff point to yield a total of 2,000 liters of good products was $4,500. There were no inventory balances of A and B.
Product A may be processed further to yield 1,375 liters of Product Z5 for an additional processing cost of $150. Product Z5 is sold for $25.00 per liter. There was no beginning inventory and ending inventory was 125 liters.
Product B may be processed further to yield 375 liters of Product W3 for an additional processing cost of $275. Product W3 is sold for $30.00 per liter. There was no beginning inventory and ending inventory was 25 liters.
If Product Z5 and Product W3 are produced, what are the expected sales values of production, respectively?
A) $11,250 and $34,375
B) $22,500 and $ 5,000
C) $31,250 and $10,500
D) $34,375 and $11,250
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