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# 1. Logan Company manufactures one main product and 2 by products, A and B.

for April,
the following data are available:
Main
Product
P75,000
P11,500

A
P6,000
P1,100

Sales
Manufacturing cost after
separation
6,000
750
expenses
Manufacturing cost before split
of
Profit allowed for A and B is 15% and 12% respectively

By-Product
B
P3,500
P900
550

Total
P84,500
P13,500
7,300
37,500

Required:
1. Calculate manufacturing cost before separation for by-products A and B, using market
value reversal cost method.
2. Prepare and Income statement detailing sales and cost for each product
2. Hatteras Corp. manufactures products W, X, Y and Z from a joint process. Additional
information follows:
Market
If process further
Units
Value at
Market
Produced Split of
al Cost
Value
W
6,000
80,000
7,500
90,000
X
5,000
60,000
6,000
70,000
Y
4,000
40,000
4,000
50,000
Z
3,000
20,000
2,500
30,000
Required: Assuming that the market value method is used, allocate a share of the total joint
production cost of P150,000 to each product
3. Martens Company manufactures joint products X and Y as well as by-product Z.
Cumulative joint cost data for the period show P208,000, representing 20,000
completed units 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 iin subsequent operations. To determine the cost allocation to
Z, the market value (reversal cost) method is used. Additional data:
Z
X
Y
Quantity processed
2,000
8,000
10,000
units
units
units
Sales price per unit
P9
P20
P25
Further processing cost per
2
5
7
unit
Marketing and
Expenses
1
per unit
Operating profit per unit
2
Required: Compute the joint cost allocated to Z, then the amount to X and Y
4. The Prudential Company produces three products E, S, and C, as the result of joint
processing, which costs P150,000
E
S
C
Units produced
30,000
15,000
13,000
Separable processing costs
P30,000
P24,000
P27,000

## Unit sales price

P4.30

P6.60

P6.00

Required:
1. Allocate the joint cost to the three products using the market value method.
2. Suppose that product S could be sold at the split of point for P5.50. Would that be a
good idea? Show calculations.
5. Getty company manufactures three products A, B and C as a result of a joint process.
During October, joint processing costs totaled P288,000. Details regarding each of the
three products show:
A
B
C
Units produced
1,000
3,000
5,000
Units sold
800
2,500
4,300
Further processing costs
P25,000
P60,000
P105,000
Sales price per unit
P100
P80
P50
Required:
1. Compute the cost assigned to the ending inventory of each product and in total,
using the market value method for joint product cost allocation. There were no units
in finished goods on October 1
2. Customer have been found who would be willing to buy all of the output of each
product at the split of point for the following prices: A, P60; B. P65; C, P25. Show
which of the products should be sold at the split of point.
3. Would your answer to requirement 2 change if Product Bs further processing cost of
P60,000 included P18,000 of allocated fixed costs? Why or why not?
4. Now suppose the P60,000 cost of Bs further processing includes P18,000 of
allocated fixed costs, and the facilities that would be used to further process B have
been alternative use. If B is not processed further, the alternative use of these
facilities will generate revenue of P6,000 and variable costs of P1,000. Should B be
processed further?
5. Plano Company manufactures three products A, B and C from a joint process. The
joint costs for January total P100,000. Additional January information follows:
Processing
Ultimate
Product
Quantity
Cost after
Market
SOP
Value
A
3,000
P20,000
P60,000
B
4,000
30,000
110,000
C
3,000
50,000
180,000
Required:
1. Compute the total production cost for each product using the average unit cost
method.
2. Compute the total production cost for each product using the market value
method
6. Michael Inc. produces four joint products having a manufacturing cost of P70,000 at
the split of point. The following data pertain to these products.
Units
Ultimate
Processing
Produced
Market Value /
cost after
Weight
Unit
SOP
Factor
K
5,000
P5.50
P1,500
3.0 points
L
20,000
1.60
3,000
2.0 points
M
15,000
1.50
2,500
4.0 points
N
10,000
3.00
5,000
2.5 points
Required: allocate joint products cost using:
a. Average unit cost method
b. Weighted average method
c. Market value method

7. Kravitz Companys production schedule shows 10,000 units of X and 8,000 units of
Y. Both articles are made from the same raw materials, but units of X and Y require
estimated quantities of materials in the ratio of 3:2, respectively. Both articles pass
through the same conversion process, but X and Y require estimated production
times per unit in the ratio of 6:5 respectively.
Required: Complete the unit materials and conversion costs for each product if the
total costs are : materials : P92,000; conversion cost, P150,000.

8. Conviser Company produces three products jointly. During May, joint costs totaled
P200,000. The following individual product information is available:
C
L
T
Production
15,000
10,000
20,000
Sales units
13,000
9,000
10,000
Sales price
P20.00
P15.00
P9.50
Separable processing cost
P75,000
P25,000
P40,000
Required:
1. Compute the May gross profit, for each product and in total, using the market
value allocation method.
2. A customer has ofered to buy all of Product T output at the split of point for P7
per unit.
9. Shafner Corporation produces three products, Alpha, Beta and Gamma. Alpha and
Gamma are joint products; Beta is a by product of Alpha. No joint cost is to be
allocated to the by product. The production processes for a given year are as
follows:
a. In Department !, 110,000 pounds of material Rho are processed, at a total cost of
P120,000. After processing 60% of the units are transferred to department 2, and
40% of the units (now Gamma) are transferred to Department 3
b. In Department 2, the material is further processed at a total additional cost of
P38,000. Seventy percent of the units (now Alpha) are transferred to Department
4 and 30% emerge as Beta, the by product , to be sold at P1.20 per pound. The
marketing expense related to Beta is P8,100.
c. In Department 4, Alpha is processed at a total additional cost of P23,660. After
processing, Alpha is ready for sale at P5 per pound.
d. In Department 3, Gamma is processed at a total additional cost of P165,000. In
this department, a normal loss of units of Gamma occurs, which equals 10% of
the good output of Gamma. The remaining good output is sold for P12 per
pound.
Required:
a. Prepare a schedule showing the allocation of the P120,000 joint cost between Alpha
and Gamma, using the market value at split of point and treating the net realizable
value of Beta as an addition to the sales value of Alpha.
b. Prepare a statement of gross profit for Alpha, independent of the answer to
requirement 1 assuming that:
P102,000 of total joint cost is appropriately allocated to Alpha
48,000 pound of Alpha and 20,000 pound of Beta are available for sale
During the year, sales of Alpha were 80% of the pounds available for sale. There
was no beginning inventory.
The net realizable value of Beta available for sale is to be deducted from the cost
of producing Alpha. The ending inventory of Alpha is to be based on the net cost
of production.
All other costs, sales prices, and marketing expenses are those presented in the
facts of the original problem.

10. The following data appear in the records for Recklonville Company for February:
Process
1
2
3
Unit data:
Beginning work in process inventory
(1/3 complete in Process 2 and 3)
3,000
3,000
32,000
10,000
20,000
32,000
13,000
23,000
======
======
=====
Transferred to Process 2
10,000
Transferred to Process 3
20,000
Transferred to finished goods storeroom
9,000
20,000
Transferred out as by product
2,000
Normal loss
1,000
Ending work in process inventory
(1/4 complete in process 2 and complete in
________
4,000
2,000
Process 3
32,000
13,000
23,000
=======
======
======
Partial summary of costs
Beginning work in process inventory
Transferred from process 1
P6,000
P11,500
2,000
3,000
Material
P58,000
30,000
18,000
60,000
P88,000
Less: market value of by product
4,000
P84,000
======
Materials are issued in Process 1. At the end of processing in Process 1, the by product
appears. The balance of production is transferred out some to Process 2 for additional
processing of one main product and the rest to Process 3 for additional processing of the other
main product.
The joint cost of Process1, less the market value of the by product, is apportioned to the main
products using the market value method at the split of point. Sales prices for the finished
products of Processes 2 and 3 are P10 and P15, respectively. The by product sells for P2.
Required:
1. Prepare a department cost of production report for February, assuming that the
company uses the average costing method (carry unit costs to 4 decimal places and
round all other mounts to the nearest peso.
2. Using computations from requirement 1, prepare the journal entries transferring cost
from each of the three processes
3. Repeat requirement 1, assuming that the company uses the fifo costing method and
that the normal loss in Process 3 is from units transferred in during February.
4. Using computations from requirement 3, prepare journal entries transferring cost from
each of the 3 processes