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A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow:         Pep Vim Zest Unit Produced     5000 4000 1000 Sales price per unit     50 40 5 Further processing cost per unit   10 5 0 Selling and adm. Expense per unit 0 0 2 operating profit per unit   0 0 1   Required: The gross profit for pep is   The value of Zest to deducted from the joint cost is

A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow:         Pep Vim Zest Unit Produced     5000 4000 1000 Sales price per unit     50 40 5 Further processing cost per unit   10 5 0 Selling and adm. Expense per unit 0 0 2 operating profit per unit   0 0 1   Required: The gross profit for pep is   The value of Zest to deducted from the joint cost is

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A Chemical Company manufactures joint products Pep and Vim, and a by product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow:

       

Pep

Vim

Zest

Unit Produced

    

5000

4000

1000

Sales price per unit

    

50

40

5

Further processing cost per unit

  

10

5

0

Selling and adm. Expense per unit

0

0

2

operating profit per unit

  

0

0

1

 

Required:

  1. The gross profit for pep is

 

  1. The value of Zest to deducted from the joint cost is
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