ABC Company processes direct materials up to the split-off point where two products, A and B, are
Question:
ABC Company processes direct materials up to the split-off point where two products, A and B, are obtained. The following information was collected for the month of July:
Direct materials processed: 3,000 liters (with 15% shrinkage)
Production: A 600 liters
B 1,950 liters
Sales: A $35.00 per liter
B $30.00 per liter
The cost of purchasing 3,000 liters of direct materials and processing it up to the split-off point to yield a total of 2,550 liters of good products was $7,500. There were no inventory balances of A and B. Product A may be processed further to yield 500 liters of Product Z5 for an additional processing cost of $170. Product Z5 is sold for $24 per liter. There was no beginning inventory and ending inventory was 125 liters. Product B may be processed further to yield 1,785 liters of Product W3 for an additional processing cost of $325. Product W3 is sold for $35 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?