Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
-What are the respective physical volume proportions for products X and Y?
A)55.00% and 45.00%
B)54.00% and 46.00%
C)52.63% and 47.37%
D)47.37% and 53.63%
E)36.36 % and 63.64%

Question

Use the information below to answer the following question(s).Chem Manufacturing Company processes direct materials up to the splitoff point, where two products (X and Y)are obtained and sold.The following information was collected for the month of November.Direct materials processed:
10,000 litres (10,000 litres yield 9,500 litres of good product and 500 litres of shrinkage)
  The cost of purchasing 10,000 litres of direct materials and processing it up to the splitoff point to yield a total of 9,500 litres of good products was $975,000.The beginning inventories totalled 50 litres for X and 25 litres for Y.Ending inventory amounts reflected 300 litres of product X and 525 litres of product Y.October costs were per unit were the same as November.
-What are the respective physical volume proportions for products X and Y?
A)55.00% and 45.00% 
B)54.00% and 46.00% 
C)52.63% and 47.37% 
D)47.37% and 53.63% 
E)36.36 % and 63.64%

Quizplus · Accepted Answer

To calculate the physical volume proportions, we need to add up the beginning inventory, direct materials processed, and ending inventory for each product, and then divide each product's volume by the total volume.

For product X: 
Beginning inventory = 50 litres 
Direct materials processed = 9500 x (10,000/9,500) = 10,000 litres 
Ending inventory = 300 litres

Total volume = 50 + 10,000 + 300 = 10,350 litres

Physical volume proportion for X = (50 + 300 + 9500) / 10,350 = 0.5263 or 52.63%

For product Y: 
Beginning inventory = 25 litres 
Direct materials processed = 10,000 - 9,500 = 500 litres 
Ending inventory = 525 litres

Total volume = 25 + 500 + 525 = 1,050 litres

Physical volume proportion for Y = (25 + 500 + 525) / 1,050 = 0.4737 or 47.37%

Therefore, the answer is C) 52.63% and 47.37%.

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