Exercise 8-7. REVERSAL COST METHOD FOR BY-PRODUCTS RC Inc. manufactures one main product and two by-products. Data for July of the current year follow: Byproduct A P 12,000 Main Product P150,000 75,000 Byproduct B P 7,000 Sales Manufacturing cost before separation 1,800 Manufacturing cost after separation Selling and general 23,000 2,200 12,000 1,500 1,100 expenses REQUIRED: An income statement, assuming no beginning or ending inventories and using the reversal cost method for the by-products, allowing a 15% operating profit for Byproduct A and 12% operating profit for Byproduct B.
Exercise 8-7. REVERSAL COST METHOD FOR BY-PRODUCTS RC Inc. manufactures one main product and two by-products. Data for July of the current year follow: Byproduct A P 12,000 Main Product P150,000 75,000 Byproduct B P 7,000 Sales Manufacturing cost before separation 1,800 Manufacturing cost after separation Selling and general 23,000 2,200 12,000 1,500 1,100 expenses REQUIRED: An income statement, assuming no beginning or ending inventories and using the reversal cost method for the by-products, allowing a 15% operating profit for Byproduct A and 12% operating profit for Byproduct B.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Exercise 8-7. REVERSAL COST METHOD FOR BY-PRODUCTS
RC Inc. manufactures one main product and two by-products. Data for July of the current year follow:
Byproduct
A
P 12,000
Main
Product
P150,000
75,000
Byproduct
B
P 7,000
Sales
Manufacturing
cost
before separation
Manufacturing
after separation
Selling and general
cost
23,000
2,200
1,800
12,000
1,500
1,100
expenses
REQUIRED: An income statement, assuming no beginning or ending inventories and using the reversal
cost method for the by-products, allowing a 15% operating profit for Byproduct A and 12% operating
profit for Byproduct B.
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