A chemical company which uses a joint process manufactures products 0,P and M, which are all derived from one input. The company allocates joint costs to the products in proportion to the relative physical volume of output. The company may either sell the products at the point of split-off or process further in order to maximize profits. The following data were obtained for February (SEE PICTURE BELOW): Joint production costs were P15,000. Additional processing on products O and P were performed, while product M was sold at the point of split-off. The gross profit of the company derived from the production process for the month of February was: * No. of units Sales produced If process further price/unit at sales price Additional per unit P 5.00 P 4.00 Р3.75 split-off P 4.00 P 2.25 P 3.00 cost per unit P0.80 2,000 P 3,000 1,500 P 1.50 P0.90 M а. Р 4,250 O b. P 5,175 D C.P 5,400 D d. P 6,525
A chemical company which uses a joint process manufactures products 0,P and M, which are all derived from one input. The company allocates joint costs to the products in proportion to the relative physical volume of output. The company may either sell the products at the point of split-off or process further in order to maximize profits. The following data were obtained for February (SEE PICTURE BELOW): Joint production costs were P15,000. Additional processing on products O and P were performed, while product M was sold at the point of split-off. The gross profit of the company derived from the production process for the month of February was: * No. of units Sales produced If process further price/unit at sales price Additional per unit P 5.00 P 4.00 Р3.75 split-off P 4.00 P 2.25 P 3.00 cost per unit P0.80 2,000 P 3,000 1,500 P 1.50 P0.90 M а. Р 4,250 O b. P 5,175 D C.P 5,400 D d. P 6,525
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 16
Cost Accounting
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Transcribed Image Text:A chemical company which uses a joint process manufactures products 0,P and M, which are
all derived from one input. The company allocates joint costs to the products in proportion to
the relative physical volume of output. The company may either sell the products at the point
of split-off or process further in order to maximize profits. The following data were obtained
for February (SEE PICTURE BELOW):
Joint production costs were P15,000. Additional processing on products O and P were
performed, while product M was sold at the point of split-off. The gross profit of the company
derived from the production process for the month of February was: * O
No. of units Sales
produced
If process further
price/unit at Sales price Additional
per unit
P 5.00
P 4.00
Р 3.75
split-off
P 4.00
P 2.25
Р 3.00
cost per unit
P0.80
2,000
P
P 1.50
3,000
1,500
M
P0.90
О а.Р4,250
O b. P 5,175
O C.P 5,400
O d. P 6,525
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