MERGE Inc. manufactures ZEN product from a process that yields a by-product called YAN. The by-product requires additional processing cost of Php 30,000.00. The by-product will require selling and administrative expenses total Php 20,000.00. It is MERGE's accounting policy to charge the joint costs to the main products only. Information concerning a batch produced during the year ended December 31,2020 follows: (a) Product Name: ZEN, units produced: 100,000, Market Value at Split Off: Php 50.00, Units sold: 60,000, (b) Product Name: YAN, units produced: 8,000, Market Value at Split Off: Php 10.00, Units sold: 8,000. The joint costs incurred up to split-off point are: Direct Materials Php 2,000,000, Direct Labor Php 800,000, Factory Overhead Php 200,000.00. The selling and administrative expense of MERGE Inc. for the year ended December 31, 2020 is Php 1,000,000.00 exclusive of that for the by-product. 1.What is the gross profit for the year if the net revenue from by-product is presented as other income? 2.What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue?
MERGE Inc. manufactures ZEN product from a process that yields a by-product called YAN. The by-product requires additional
1.What is the gross profit for the year if the net revenue from by-product is presented as other income?
2.What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue?
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