The Trece Co. manufactures joint products X and Y as well as by-product Z. Cumulative costs data for the period show P204,000 representing 20,000 units completed processed through the Refining Department at an average cost of P10.20. Costs are assigned to X and Y by the market value method which considers further processing costs in subsequent operations. Additional data: Z X Y Quantity processed 2,000 units 8,000 units 10,000 units Sales price per unit P5 P20 P25 Further processing cost per unit 1 5 7 Marketing and administrative expense per unit 1 Operating profit per unit 1 Required: a. Assuming by-product value is material determine the joint cost allocated to Z using Net realizable value method and joint cost to X and Y. b. Assuming by-product value is immaterial and insignificant, what is the joint cost allocated to X and Y.
The Trece Co. manufactures joint products X and Y as well as by-product Z. Cumulative costs data for the period show P204,000 representing 20,000 units completed processed through the Refining Department at an average cost of P10.20. Costs are assigned to X and Y by the market value method which considers further
Additional data: Z X Y
Quantity processed 2,000 units 8,000 units 10,000 units
Sales price per unit P5 P20 P25
Further processing cost per unit 1 5 7
Marketing and administrative
expense per unit 1
Operating profit per unit 1
Required:
a. Assuming by-product value is material determine the joint cost allocated to Z using Net realizable value method and joint cost to X and Y.
b. Assuming by-product value is immaterial and insignificant, what is the joint cost allocated to X and Y.
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