Answer the following questions 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:
The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-Argon Manufacturing Company processes direct materials up to the splitoff point where two products (U and V)are obtained and sold. The following information was collected for last quarter of the calendar year: The cost of purchasing 20,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 19,000 gallons of good products was $1,950,000.
Beginning inventories totaled 100 gallons for U and 50 gallons for V. Ending inventory amounts reflected 600 gallons of Product U and 1,050 gallons of Product V. October costs per unit were the same as November.
What are the physical-volume proportions for products U and V, respectively?
A)47.37% and 53.63%
B)55.00% and 45.00%
C)52.63% and 47.37%
D)54.00% and 46.00%

Question

Answer the following questions 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:
    The cost of purchasing 250,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 242,500 gallons of good product was $760,000.
-Argon Manufacturing Company processes direct materials up to the splitoff point where two products (U and V)are obtained and sold. The following information was collected for last quarter of the calendar year:    The cost of purchasing 20,000 gallons of direct materials and processing it up to the splitoff point to yield a total of 19,000 gallons of good products was $1,950,000.
Beginning inventories totaled 100 gallons for U and 50 gallons for V. Ending inventory amounts reflected 600 gallons of Product U and 1,050 gallons of Product V. October costs per unit were the same as November.
What are the physical-volume proportions for products U and V, respectively?
A)47.37% and 53.63% 
B)55.00% and 45.00% 
C)52.63% and 47.37% 
D)54.00% and 46.00%

Quizplus · Accepted Answer

To find the physical-volume proportions, we need to divide the total gallons of each product by the combined gallons of both products:

Total gallons of U = beginning inventory + gallons produced - ending inventory = 100 + (19,000 x 600/19,000) - 600 = 4,800
Total gallons of V = beginning inventory + gallons produced - ending inventory = 50 + (19,000 x 1,050/19,000) - 1,050 = 2,350

Combined gallons = 4,800 + 2,350 = 7,150

Physical-volume proportion of U = 4,800/7,150 = 0.673 (or 67.3%)
Physical-volume proportion of V = 2,350/7,150 = 0.327 (or 32.7%)

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

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