June Maylyn D.

Marzo
BSAIS 2nd year

1. Lego Plastics, Inc, has two joint products, ABBA and ADDA, and uses the net
realizable value method of allocating joint costs. The total joint costs for
the year 2000 amounted to P 300,000. During the year, additional
processing costs after split-off were P 160,000 for ABBA and P 240,000 for
ADDA. Lego produced 16,000 units of ABBA and 8,000 units of ADDA during
the year. The selling price for ABBA is P 20.00 and for ADDA is P 50.00.The
portion of joint costs allocated to ADDA during the year is _150,000____

2. Janice Corporation processes direct materials up to the split-off point,

where products R and S are produced and thereafter sold. For the
month just ended, the following information were made availableDirect
materials, 20,000 gallons (yield –19,000 gallons of good product and 1,000
gallons of shrinkage)Production: R, 10,000 gallons; S, 9,000 gallons;Unit
selling price: R, P 1,500 per gallon; S, P 1,000 per gallon;The cost of buying
20,000 gallons of direct materials and processing up to split-off point to yield a
total of 19,000 gallons of good products was P 19,500,000. The beginning
inventories totaled 100 gallons for R and 50 gallons for S. Ending inventories
amounts reflected 600 gallons for R and 1,050 gallons for S.Using the
volume of production as the basis for allocating joint costs, the assigned
costs to R and S would be _R, ₱10,263,157.89 and S, ₱9,236,842.11___
3. Comely Products manufactures products R, S and T in a joint process.
For every ten kilos of raw materials input,the output is five kilos of R, three
kilos of S, and two kilos of T. During August, 50,000 kilos of raw materials
costing P120,000 were processed and completed, with joint conversion costs
of P 200,000. Conversion costs are to be allocated to the productson the
basis of market values. To make the products saleable, further processing
which does not require additional materials was done at the following
costs:Further processing costsSelling priceProduct RP 30,000P 10.00Product
S20,00012.00Product T30,00015.00
The unit cost of product R is ________
Assuming that all units are sold, the gross margin on sales for product S is
________
June Maylyn D. Marzo
BSAIS 2nd year

If all units of Product T are sold, and selling and administrative

expenses are 20% of sale, the net income from sale of product T is
__________

The gross profit on this sale is the ultimate sales price less the cost of goods
sold. In a joint processing situation, the cost of the goods sold includes both
the allocation of joint costs up to the split-off point and all further processing
costs. The allocation of joint costs incurred prior to split-off is based on
relative sales value at the split-off point. For Product W, relative sales value is
its sales value at split-off divided by total sales value at split-off or
P60,000/P750,000 = 8%. The allocation of joint costs is then 8% of total joint
costs, or (8%) (P450,000) = P36,000. The gross profit is computed as follows:
Ultimate sales price P78,000
Allocation of joint costs P36,000
Further processing costs 12,000 (48,000)
Gross profit P30,000
4. Lee Company produces two products in a single operation, Bex and Rom.
Joint production costs for June 2016 were P30,000. During the month, further
processing costs beyond the split-off point neededt convert the products into
salable form were P 25,000 and P 35,000 for 1,600 units of Bex and 800
units of Rom, respectively. Bex sells for P 50 per unit and Rom sells for P 100
per unit. Lee uses the net realizable value for allocating joint costs.
For June 2016, the joint costs allocated to product Bex were
____16,500_____
5. Life Company manufactures products X and Y from a joint process that
also yields a by-product Z. Revenue from sales of Z is treated as a
reduction of joint costs. Additional information is as follows:
X Y Z Total
Units produced20,000 20,000 10,000 50,000
Joint costs??? 262,000
SV at SOP P 300,000 P 150,000 P 10,000 P 460,000
Joint costs were allocated using the SV at SOP method. The joint
costs allocated to product X were _168,000___
June Maylyn D. Marzo
BSAIS 2nd year

6. From a particular joint process, TWO KNIVES COMPANY produces products

X, Y and Z. Each product may be sold at split-off or processed further.
Additional processing requires no special facilities, and production costs of
further processing are entirely variable and traceable to the products involved.
In 2016, all three products were processed beyond split-off. Joint production
costs for the year were P 60,000. Sales value and costs for 2016 are as
follows:
XYZ
Units produced 4,000 4,000 2,000
Sales value at SOP P 25,000 P 41,000 P 24,000
If processed further
Final sales value 42,000 45,000 32,000
Separable costs 9,000 7,000 8,000
Joint costs are allocated to the products in proportion to the relative physical
volume of output. The relevant unit costs for a decision to sell product Z or
process further is _₱4.00_______.
7. To maximize operating income, the company would be subjected to the
following additional processing: X only
8. The Burns Company produces two joint products, X and Y. In separating
products X and Y, a by-product is also produced. During the month of July,
20,000 gallons of input were processed producing 12,000 gallons of X, 7000
gallons of X, and 7,000 gallons of Y and 1,000 gallons of the by-product. The
materials and conversion costs incurred to process and separate the
products amounted to P 57,000. The following were taken from the books
for the month of July.
Product Addtl processing cost Sales price Sales unit
XP .50/ gallon P 6.5010,000Y P .75/ gallon5.505,000Z P .10/ gallon2.00700
Using the physical measure to allocate joint costs, the total
manufacturing costs per unit for X, assuming that the by-product is valued
at zero cost at the split –off point is ₱3.50