Exercise 8-3. JOINT COST ALLOCATION - HYPOTHETICAL MARKET VALUE METHOD JC Company manufactures three different products from a single raw material. A summary of production costs shows:                                           Product           Product           Product          Total                                                 B                       A                       Y Output in kgs                 80,000              200,000          160,000          440,000 Selling price/ kg             P0.75                P1.00               P1.50                                                                           Costs:                                             Product          Product            Product           Total                                                   B                      A                         Y                Cost Materials                                -0-                    -0-                      -0-             P90,000 Direct Labor                       P 3,000           P20,000             P30,000         80,000 Variable FOH                        2,000              10,000              16,000           45,000 Fixed FOH                            15,000             34,000              30,000          115,000 All separable costs have been assigned to products but the joint cost has not been allocated. All of the year’s output was sold. Compute for the total cost for each product, allocating the joint cost by the market value method.

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Exercise 8-3. JOINT COST ALLOCATION - HYPOTHETICAL MARKET VALUE METHOD

JC Company manufactures three different products from a single raw material. A summary of

production costs shows:

                                          Product           Product           Product          Total

                                                B                       A                       Y

Output in kgs                 80,000              200,000          160,000          440,000

Selling price/ kg             P0.75                P1.00               P1.50

                                                                          Costs:

                                            Product          Product            Product           Total

                                                  B                      A                         Y                Cost

Materials                                -0-                    -0-                      -0-             P90,000

Direct Labor                       P 3,000           P20,000             P30,000         80,000

Variable FOH                        2,000              10,000              16,000           45,000

Fixed FOH                            15,000             34,000              30,000          115,000

All separable costs have been assigned to products but the joint cost has not been allocated. All of

the year’s output was sold. Compute for the total cost for each product, allocating the joint cost by

the market value method.

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