Answer the following question(s) using the information below.
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
Direct materials processed: 250,000 litres (242,500 litres of good product)
The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.
-When using the physical measures method, what is Mr. DirtOut's approximate production cost per unit?
A) $1.52
B) $1.54
C) $1.57
D) $1.61
E) $1.01

Question

Answer the following question(s) using the information below.
The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. DirtOut and Mr. SinkClean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January:
Direct materials processed: 250,000 litres (242,500 litres of good product)
  The cost of purchasing 250,000 litres of direct materials and processing it up to the splitoff point to yield a total of 242,500 litres of good product was $380,000.
-When using the physical measures method, what is Mr. DirtOut's approximate production cost per unit?
A) $1.52 
B) $1.54 
C) $1.57 
D) $1.61 
E) $1.01

Quizplus · Accepted Answer

[$380,000 × (147,500/242,500)]/147,500 = $1.57

Answer the Following Question(s) Using the Information Below