Gary Company Produces Products X, Y, and Z from a Single

Multiple Choice

Gary Company produces products X, Y, and Z from a single raw material input. Budgeted data for the next month is as follows: $\begin{array}{lrr}&&\text { product }\\& \text { X} & \text { Y } & \text { Z } \\ \text {Units produced. } &2,500& 3,000 & 4,000\\ \text { Per unit sales value at split-off.} & £ 20.00&£ 22.00&£ 25.00\\ \text {Added processing costs per unit. } &£ 8.00&£ 8.50& £ 8.00 \\ \text {Per unit sales value if processed further. } &£ 30.00 & £ 30.00 &£ 35.00\\\end{array}$

If the cost of raw material input is £150,000, which of the products should be processed beyond the split-off point?
$\quad$ $\quad$ $\quad$$\text { Product }$
$\begin{array}{lrr}&&\\ &\text {X}&&\text {Y}&&\text {Z}\end{array}$

A. $\begin{array}{lrr} \text { no } & \text { yes }& \text {no } \\\end{array}$
B. $\begin{array}{lrr} \text {no} & &\text {yes } & \text { yes }\\\end{array}$
C. $\begin{array}{lrr} \text {yes } & \text { no }& \text {yes } \\\end{array}$
D. $\begin{array}{lrr} \text {yes } & \text { yes }& \text { no }\\\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D