ts in subsequent operations. To determine the cost allocation to B, the market value (reversal cost) method is used. Additional data: B A R
Exercise 8-8. JOINT COST ALLOCATION & BYPRODUCT ALLOCATION – MARKET VALUE
METHOD
The BAR Company manufactures joint products A and R as well as byproduct B. Cumulative cost
data for the period show P204,000 representing 20,000 completed units processed through the
Refining Department at an average cost of P10.20. Costs are assigned to A and R by the market
value method which considers further processing costs in subsequent operations. To determine the
cost allocation to B, the market value (reversal cost) method is used. Additional data:
B A R
Quantity processed 2,000 8,000 10,000
Sales price per unit P 5.00 P20.00 P25.00
Further
Selling and general expenses per unit 1.00 - -
Operating profit per unit 1.00 - -
REQUIRED: Cumulative cost allocated to B, A, and R
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