Use the information below to answer the following question(s):
Orange Paper Company processes wood pulp into two products.During February the joint costs of processing were $156,000.Production and sales value information for the month were as follows:
Paper sells for $2.85 a kilogram and cardboard sells for $3.90 a kilogram.There were no beginning inventories for April but ending inventories totalled 15,000 kilograms for paper and 18,000 kilograms for cardboard.
-What will be the total incremental benefit or (loss)from all potential sales of processing the paper beyond the splitoff point?
A)$251,000
B)$281,000
C)$513,000
D)$311,000
E)$232,000

Question

Use the information below to answer the following question(s):
Orange Paper Company processes wood pulp into two products.During February the joint costs of processing were $156,000.Production and sales value information for the month were as follows:
  Paper sells for $2.85 a kilogram and cardboard sells for $3.90 a kilogram.There were no beginning inventories for April but ending inventories totalled 15,000 kilograms for paper and 18,000 kilograms for cardboard.
-What will be the total incremental benefit or (loss)from all potential sales of processing the paper beyond the splitoff point?
A)$251,000 
B)$281,000 
C)$513,000 
D)$311,000 
E)$232,000

Quizplus · Accepted Answer

The total incremental benefit or loss is calculated by considering the additional revenue from processing the paper beyond the splitoff point minus the additional costs incurred.

Use the Information Below to Answer the Following Question(s)