Problem No. 2- Joint and By-Products CBA Company produced two joint products A and B and two by-products Y and Z from the same raw materials with joint costs P250,000. The entity uses the physical unit costs method in allocating joint costs to main products and reversal cost method to by-products. Additional information is given below: Products A B Y 2/4 Units Produced 20,000 30,000 5,000 5,00 Units Sold 19,000 28,000 5,000 5,000 Final unit selling price P25 P20 P2 P1.50 Additional processing P150,000 P210,000 P5,000 P4,000 costs Operating Expenses P25,000 P30,000 P500 P400 Desired Profit P2,000 P1,500 Requirement: (1) Prepare a schedule showing the distribution of joint costs, and (2) prepare a statement of comprehensive income showing the sales, cost of goods sold, gross profit, operating expenses and net profit by product.

Problem No. 2- Joint and By-Products CBA Company produced two joint products A and B and two by-products Y and Z from the same raw materials with joint costs P250,000. The entity uses the physical unit costs method in allocating joint costs to main products and reversal cost method to by-products. Additional information is given below: Products A B Y 2/4 Units Produced 20,000 30,000 5,000 5,00 Units Sold 19,000 28,000 5,000 5,000 Final unit selling price P25 P20 P2 P1.50 Additional processing P150,000 P210,000 P5,000 P4,000 costs Operating Expenses P25,000 P30,000 P500 P400 Desired Profit P2,000 P1,500 Requirement: (1) Prepare a schedule showing the distribution of joint costs, and (2) prepare a statement of comprehensive income showing the sales, cost of goods sold, gross profit, operating expenses and net profit by product.

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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Exercise 1-11 (Algo) Cost Behavior; Contribution Format Income Statement (LO1-4, LO1-6] Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 51,000 to 91,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 81,000 units during the year at a selling price of $9.09 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 71,000 Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost Fixed cost Total cost per unit S S $1,000…
Bruce Corporation makes four products in a single facility. These products have the following unit product costs: Products A B C D Direct materials $ 19.90 $ 15.20 $ 20.80 $ 23.20 Direct labor 12.20 8.70 10.50 7.40 Variable manufacturing overhead $ 1.60 $ 2.10 $ 2.00 $ 2.10 Fixed manufacturing overhead 10.80 11.90 8.80 10.70 Unit product cost 44.50 37.90 42.10 43.40 Additional data concerning these products are listed below. Products A B C D Grinding minutes per unit 1.20 0.70 0.60 0.60 Selling price per unit $ 59.30 $ 51.70 $ 59.50 $ 55.60 Variable selling cost per unit $ 3.60 $ 1.50 $ 2.20 $ 3.60 Monthly demand in units 4,000 2,000 4,000 2,000 The grinding machines are potentially the constraint in the production facility. A total of 9,000 minutes are available per month on these machines. Direct labor is a variable cost in this company. Which product makes the MOST profitable use of the grinding machines? (Round your intermediate calculations to…
King Company has two divisions whose most recent financial statements are shown below: Residential Division Commercial Division 5,340 $417,000 Unit sales Sales Less: cost of goods sold: Unit-level production costs Depreciation, production equipment Gross margin Less: operating expenses: Unit-level selling and administrative Corporate-level facility costs (fixed) Net income (loss) Unit sales Sales Less: cost of goods sold: Unit-level production costs Depreciation, production equipment Required: a. Compute the impact on profit if the Residential Division is eliminated. Gross margin Less: operating expenses: Unit-level selling and administrative Corporate-level facility costs (fixed) Net income (loss) 176,700 83,500 $156,800 Commercial Division Yes No 41,700 21,000 $94, 100 b. Do you recommend that King eliminate the Residential Division? 1,340 $117,000 61,700 33,500 $21,800 11,700 16,000 $(5,900)
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Heidelberg Fabrication manufactures two products, G -09 and G-35: \table[[, G- 69, G-35], [Units produced, 18,700, 3, 740], [Direct materials cost per unit, $7,$19 C Heidelberg Fabrication manufactures two products, G-09 and G-35: G-09 6-35 Units produced 18,700 3,740 Direct materials cost per unit Machine-hours per unit $ 7 $ 19 Production runs per quarter 4 144 7 72 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: Machine depreciation Setup labor Materials handling Total $ 100,980 50,490 40,392 $ 191,862 Required: a. Compute the unit costs for the two products, G-09 and G-35, using the current costing system at Heidelberg (using machine-hours as the allocation basis). b. Compute the unit costs for the two products, G-09 and G-35, using the proposed ABC system at Heidelberg. Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. Unit Cost G-09 G-35…
PQ Group PQ Group comprises two divisions: P and Q. Division P manufactures a product which is transferred to Division Q, where it is converted into the final product for external sale. One unit of the intermediate product is used to make one unit of the final product. The costs of each division are as follows: P Division Q Division Variable cost per unit £2 £5* Fixed costs attributable to the product £2,000 £10,000 Maximum capacity 2,250 2,250 * excluding the cost of the transferred item Market research has produced the following information about possible levels of sales of the final product at a range of prices: Selling price (£) Sales (units) 25.00 1,500 23.50 1,750 22.00 2,000 20.50 2,250 The transfer price for the intermediate product has been set on a full cost-plus basis at £4. Complete the following statements for each Division: Division P Output (units) Revenue £ Variable costs £ Fixed…
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How much is the net income attributable to Product M, assuming that joint costs are allocated using the Approximate Net Realizable Value x, and after being processed further, 1,800 gallons of Product M was sold during the year?