Department III of BORK Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated processing cost after separation is P0.30 per unit and estimated selling expenses is 10% of the sales price. The estimated profit margin is 5% of the sales price. Required. What is the total cost of the by-product? what is the gain (loss) on sale of the by-product if all of the units are sold at P1.50?

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