ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units, method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product 90,000 By-Product Monthly output in Kilos. Selling price per Kilo. Separable process costs.. 150,000 60,000 P30 P14 P2 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units method to allocate joint production costs would be:

ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units, method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product 90,000 By-Product Monthly output in Kilos. Selling price per Kilo. Separable process costs.. 150,000 60,000 P30 P14 P2 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units method to allocate joint production costs would be:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4CMA: Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint...

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ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. Monthly output in Kilos.. Selling price per Kilo. Separable process costs. First Main Product Second Main Product 150,000 P14 By-Product 60,000 P2 90,000 P30 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical…
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T or F Conversion cost per equivalent unit equals total conversion costs for the period divided by total equivalent units of conversion costs. T or F Product costs must be allocated to the units transferred out of thedepartment and the partially completed units on hand at the end of the period. T or F Ford is a process manufacturer.
Using a physical measurement method, what amount is joint processing cost is allocated to product Wan? Using net realizable value at split-off, what amount of joint processing cost is allocated to product tri?
CONSO Inc. manufactures joint products ALT and TAB, and a by-product DEL. Costs are assigned to the joint products by the net realizable value or final market value method which considers further processing costs in subsequent operations. It is the policy of CONSO Inc. to account for its by-product by market value or reversal cost method or deduction of net realizable value of by-product from the joint manufacturing costs of main products. The total manufacturing costs for 100,000 units were Php 1,520,000.00 during the year. Production and costs data follow: (a)Product Name: ALT, units produced:60,000, sales price per unit: Php 70.00, Further processing cost per unit Php 20.00 (b)Product Name: TAB, units produced:30,000, sales price per unit: Php 25.00, Further processing cost per unit Php 5.00 (C)Product Name: DEL, units produced:10,000, sales price per unit: Php 10.00, Further processing cost per unit Php 30.00, Selling and admin expense per unit, Php 5.00. 1.What is the value of DEL…
Ardmore Company produces two main products jointly, A and B, and C, which is a by-product of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B. Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. Data for April were as follows: Costs before separation P200,000 Costs after separation: A 50,000 B 32,000 C 4,000 Production for April, in pounds: A 800,000 B 200,000 C 20,000 Sales for April: A 640,000 pounds @ P0.4375 B 180,000 pounds @ 0.65 C 20,000 pounds @ 0.30 Determine the gross profit for April.
The Bangles Corporation manufactures two products, X and Y in a joint process. The data from the production of the two products is as follows: Direct Materials used 720,000 Direct Labor 300,000 Factory overhead 1,380,000 Production Output Units X 80,000 Y 240,000 Product X sells for 15 per unit and Product Y sells for 20 per unit Required: Compute the following a. Compute the total joint cost to be allocated to X and Y b. compute the joint cost to be allocated to product X using physical unit method c. Compute the joint cost to be allocated to product Y using the relative sales value method
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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
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Salt Company manufactures products J, K, and L in a joint process. The company incurred $480,000 of joint processing costs during the period just ended and had the following data that related to production: An analysis revealed that all costs incurred after the split-off point are variable and directly traceable to the individual product line. Required: A. If Salt allocates joint costs on the basis of the products' sales values at the split-off point, what amount of joint cost would be allocated to product J? B. If production of J totaled 50,000 gallons for the period, determine the relevant cost per gallon that should be used in decisions that explore whether to sell at the split-off point or process further? Briefly explain your answer. C. At the beginning of the current year, Salt decided to process all three products beyond the split-off point. If the company desired to maximize income, did it err in regards to its decision with any of the products and by how much?