La Loma Company produces four solvents from the same process: Wan, Tu, Tri, Por. Joint production costs are as follows: Materials – P4, 000; Labor – P3, 000; Overhead- P2, 000 Barrels Sales price per barrel at split-off Disposal Cost per barrel at split-off Further processing costs Final sales price per barrel Wan 750 10 6.50 2.00 13.5 Tu 1,000 8 4.00 2.50 10.00 Tri 4,000 11 7,00 4.00 15.50 Por 2,000 15 9.50 4.50 19.50 If La Loma sells the products after further processing, the following disposal costs will be incurred: C, P2.50; D, P1.00; E, P3.50; G, P6.00. (Round all answers to the nearest peso) a. Using a physical measurement method, what amount of joint processing cost is allocated to Product Por? b. Using physical measurement method, what amount of joint processing cost is allocated to Product Wan? c. Using net realizable value at split-off what amount of joint processing cost is allocated to Product Tri?
La Loma Company produces four solvents from the same process: Wan, Tu, Tri, Por. Joint production costs are as follows: Materials – P4, 000; Labor – P3, 000; Overhead- P2, 000 Barrels Sales price per barrel at split-off Disposal Cost per barrel at split-off Further processing costs Final sales price per barrel Wan 750 10 6.50 2.00 13.5 Tu 1,000 8 4.00 2.50 10.00 Tri 4,000 11 7,00 4.00 15.50 Por 2,000 15 9.50 4.50 19.50 If La Loma sells the products after further processing, the following disposal costs will be incurred: C, P2.50; D, P1.00; E, P3.50; G, P6.00. (Round all answers to the nearest peso) a. Using a physical measurement method, what amount of joint processing cost is allocated to Product Por? b. Using physical measurement method, what amount of joint processing cost is allocated to Product Wan? c. Using net realizable value at split-off what amount of joint processing cost is allocated to Product Tri?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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La Loma Company produces four solvents from the same process: Wan, Tu, Tri, Por. Joint production costs are as follows: Materials – P4, 000; Labor – P3, 000;
| Barrels | Sales price per barrel at split-off | Disposal Cost per barrel at split-off | Further processing costs | Final sales price per barrel | |
| Wan | 750 | 10 | 6.50 | 2.00 | 13.5 |
| Tu | 1,000 | 8 | 4.00 | 2.50 | 10.00 |
| Tri | 4,000 | 11 | 7,00 | 4.00 | 15.50 |
| Por | 2,000 | 15 | 9.50 | 4.50 | 19.50 |
If La Loma sells the products after further processing, the following disposal costs will be incurred: C, P2.50; D, P1.00; E, P3.50; G, P6.00. (Round all answers to the nearest peso)
a. Using a physical measurement method, what amount of joint
b. Using physical measurement method, what amount of joint processing cost is allocated to Product Wan?
c. Using net realizable value at split-off what amount of joint processing cost is allocated to Product Tri?
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