ABC Company operates a production process to convert a single material into three separate items, referred to as items A, B and C. Products A and B are ready for sale immediately upon split-off without further processing Product C. however, is processed further before being saleable. During 2022, the selling prices of the items and the total amounts sold were as follows:Product A - 168 units at P1,200 per unitProduct B - 480 units at P900 per unitProduct C - 672 units at P600 per unitTotal manufacturing costs for the year amounted to P900,000 which includes further processing costs of product C of P200,000.There were no beginning inventories while a physical count revealed the following unsold units at the end of 2022:A - 132 unitsB - 120 unitsC - 28 units1. How much is the allocated joint costs of product C using the approximate net realizable value approach?2. How much is the gross profit to be recognized in 2022 using the approximate net realizable value approach? Enter Write to

The net realizable value approach is a method to allocate joint cost. Under this approach, the joint…

Answered: ABC Company operates a production…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

ABC Company operates a production process to convert a single material into three separate items, referred to as items A, B and C. Products A and B are ready for sale immediately upon split-off without further processing Product C. however, is processed further before being saleable. During 2022, the selling prices of the items and the total amounts sold were as follows:

Product A - 168 units at P1,200 per unit
Product B - 480 units at P900 per unit
Product C - 672 units at P600 per unit

Total manufacturing costs for the year amounted to P900,000 which includes further processing costs of product C of P200,000.

There were no beginning inventories while a physical count revealed the following unsold units at the end of 2022:

A - 132 units

B - 120 units

C - 28 units

1. How much is the allocated joint costs of product C using the approximate net realizable value approach?

2. How much is the gross profit to be recognized in 2022 using the approximate net realizable value approach?

Enter

Write to

Expert Solution

Step by step

Solved in 3 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions