Bismite Corporation Purchases Trees from Cheney Lumber and Processes Them

Multiple Choice

Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of October:

The cost of purchasing 270 trees and processing them up to the split-off point to yield 150,000 sheets of paper and 150,000 pencil casings is $14,500.
Bismite's accounting department reported no beginning inventory.
What is the total sales value at the split-off point of the pencil casings?

A) $15,000
B) $21,000
C) $20,860
D) $13,700