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Sillicon Valley Corporation (SVC), which produces keyboards for...

Sillicon Valley Corporation (SVC), which produces keyboards for personal computers. We assume the following information for SVC
for the month of April.
- There are no beginning inventories of direct materials. Moreover, there is zero beginning and ending work in process.
- SVC has only one direct manufacturing cost strategy (direct materials) and one indirect manufacturing cost category
(conversion costs). All manufacturing labor costs are included in conversion costs.
- From its bill of materials and an operations list, SVC determines that direct material cost per keyboard unit is P20 and estimated
conversion cost is P10.
- SVC purchases P1,880,000 of direct materials. Actual conversion costs equal P1,280,000. SVC produces 90,000 good
keyboard units and sells 87,000 units.
- Any under allocated or over allocated conversion costs are written oN to Cost of goods sold at the end of the month.
Ready the following (any item may be asked on the online exam i.e. debits and credit of a particular entry)
1) Journal Entries if:
a. Trigger points - Purchase, completion, sale
b. Purchase, Sale
c. Completion and sale
2) Provide a General Ledger Overview for each
3) Find the following for each
a. COGS
b. RIP end
c. FG end
d. BackZushed amount

JOINT AND BYFPRODUCT

Maroon Ltd is a company that produces chemicals for the cleaning industry. One of its processes manufactures join products Y and
Z, and by-product X. The company uses the net realizable value of its joint products to allocate joint production costs. The by-product
is valued for inventory purposes at its market value less its disposal cost, and this value is used to reduce the joint production cost of
P2,015,000. Information regarding the company's August 2020 operations are presented below:
In liters Y Z X
Finished Goods inventory, August 1 30,000 100,000 40,000
August Sales 1,340,000 760,000 240,000
August Production 1,600,000 800,000 200,000
In Peso
Further Processing cost 1,400,000 1,520,000
Final Sales value per Liter 10 14
Sales value per liter at split oN 2.40
Disposal Cost per liter 0.40

Required:
1) Calculate the by-product income
2) Calculate the adjusted joint cost for allocation for August
3) Calculate the allocation of joint cost for August for products Y and Z
4) Calculate the unit cost per product and value of closing inventory
5) The company has an opportunity to sell product Z at split oN for P10 per liter. Prepare an analysis to show whether Z should be
sold at split oN point or further processing.
6) Split your joint costs between join products using physical unit method.

Accounting Business Cost Accounting 섈 쉋

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Solved by veri3ed expert 숨

Hi, here's the answer for the problems above. If you have any clarifcations or questions please feel free to comment and I shall respond as soon as
possible. Kindly rate this if you fnd it helpful. thanks! :)

1 & 2 For the journal entries and general ledger for 3 trigger points, please see attached detailed solution below. Note that for trigger 2 (completion and
sales), it is using a diNerent control account for direct materals namely the Inventory control.

3 Here are the values for question 3, note that you may refer to the journal entry and general ledger on the balances of the following variables. As for the
backZush amount, you may just fnd the diNerence in the amount of COGS in trigger 1 and 2. 3,020,000 less 2,990,000.
COGS - 2,990,000.00
RIP end - 80,000.00
FG end - 90,000.00
BackZushed amount - 30,0000

JOINT AND BY PRODUCT

1. 480,000

2. 1,535,000

3. Y: 923,023.06 Z: 611,976.94

4. Unit price per unit: Y= 1.45; Z= 2.66 Closing inventory: Y : 21,047.93; Z : 373,095.96

5. See presentation below

6. Y = 1,023,333.33 Z= 511,666.67

Step-by-step explanation

TRIGGER POINT (PURCHASE, COMPLETION AND SALES)

 섘

TRIGGER POINT (PURCHASE AND SALES)

TRIGGER POINT ( COMPLETION AND SALES)

Joint and BY product

1. By-product income

By-product income is equal to market value (price per liter X quantity sold in liters) less disposal cost (disposal cost per liter X quantity sold in liters).
:
 섘

2 Adjusted joint cost.

The problem states that by product income is used to reduced the joint cost. Thus, to get the adjuste joint cost, we will deduct the by product income from
the joint cost amounting to Php2,015,000.
Joint product cost - Byproduct income = adjusted Joint costs
Php2,015,000. - 480,000 = 1,535,000

3 Allocation of joint cost

Allocation of joint cost will be done using the Net realizable value (NRV) method (based on problem stetement). NRV is equal to fnal sales value less any
further processing cost. Computation steps are as follows:

4 Unit costs per product and value of closing inventory

Unit cost per product is equal to Allocated joint cost + further processing cost divided by total production in liter

4 analysis for opprtunity to sell at split o_ or sell after further processing

:
 섘

5 Split your joint costs between join products using physical unit method. The split will be based on the production units of each product

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