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Integrity Company manufactures two products, Alpha and Beta from a joint process.  One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta.  Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit.  The eventual market price for Alpha is P20 and for Beta, P10.  If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.   a. P42,000 b. P18,000 c. P12,000 d. P38,000

Integrity Company manufactures two products, Alpha and Beta from a joint process.  One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta.  Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit.  The eventual market price for Alpha is P20 and for Beta, P10.  If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.   a. P42,000 b. P18,000 c. P12,000 d. P38,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Integrity Company manufactures two products, Alpha and Beta from a joint process.  One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta.  Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit.  The eventual market price for Alpha is P20 and for Beta, P10. 

If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.
 
a. P42,000
b. P18,000
c. P12,000
d. P38,000
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