st whi 7 from ajoint pr which manutactures products X, Y, and Z rom ajoint process, 1 oaipdoel ooo re P60 000. Additional information is provided below. Sales If Processed Further ' Units Value at Sales Additional Product Produced —_—Splil-Off Vaues Costs 1 P40,000 P55,000 P9,0007 ; So 35,000 45,000 P7,000. z 2,000 25,000 30,000 5,000 ling that joint product costs are allocated using the physical measures (units produced) ‘Spproach, what were the total costs‘allocated to product x2 a. P27,000 c, 33,000 b. 29,000 d. 39,000 (AICPA) 2. Using the same information in No. 1, and assuming that joint product costs are allocated using the relative sales value at split-off approach, what were the total costs allocated to product. Y? - a. P27,000 c. . P28,350 b. 28,000 d. 32,200 (AICPA) 3. Forward, Inc., which manufactures products P, @, and R from ajoint process Additional information: P Q R Total Units produced 4,000 2,000 ‘1,000 7,000 Joint costs... 2 P36,000 2 2 P 60,000-~ 2 2 P15,000 P100,000 =P 7,000 P 5,000 P 3,000 P 15,000 lurther . P70,000 P30,000 P20,000 P120,000 Assumin, spl 1g that joint costs are allocated usin i su ig the relative sales value at lit-off approach, what was the sales value at split-off for product P? a. P5833 : . b. — 59'500 7 eo (AICPA) Sales value at split-off . Additional costs if processed further... Sales value if proc:ny Chapter 19 6. Using the same information in No. 5, and assume all units are considereg : sold, compute the gross profit on sales for Product S: nr c. — P60,000 6. 7000 d. 48,000 . « (PhilCPA) i ion ir ll Units Of Product T are ing the same information in No. 5, and assume al e ‘a Rouen selling and administrative expenses are 20% of sales, the net income from the sale of Product T is: a. P18,000 cc. P240,000 b. 22,000. d. 64,000 (PhilCPA) 8. Warfield Corporation, which manufactures products C, D, and E froma joint process. Joint costs are allocated on the basis of relative sales value at split-off. Additional information is presented below: Cc D E Total Units produced 6,000 4,000 2,000 12,000 Joint costs ..... P 72,000 2 2 P120,000 Sales value at split-off . 2 2 P30,000 P200,000." Additional costs if proces: further .. +P 14,000 P10,000 P 6,000 P 30,000 Sales value if processed further P140,000 P60,000 P40,000 P240,000 How much of the joint costs should Warfield allocate to product D? a. P24,000 c. — P30,000 b. 28,800 d. 32,000 (AICPA) 9. Using the same information in N lo. 8, and assumi 000 units of Product E were processed furth ces i er and sold ld? QFoss profit on the sale? uo P40,000, STE SE ets i cp: °4.000 Cc. P16,000 b. 14,000 ad * 2 (AICPA)anya By-Products ‘ 965 10. Ashwood Company manut ajoint process. Joint costs aieen at split-off. Additional informati es three main products, F, Gand W, from located on the basis of relative sales value ion for June production activity follows: : F G Ww Total : Units produced — ———-_- Ss —_ -____ Joint costs ... 50,000 ee T0.0 aoe 2 Sales value at split-off P420,000 P270,000 P60,000 P750,000 Additional costs if Processed further . ... P 88,000 P 30,000 P12,000 130,000 Sales value if processed further P538,000 P320,000 P78,000 936,000 Assuming that the 10,000 units of W were processed further and sold for P78,000, what was Ashwood's gross profit on this sale? a. P21,000 c. — P30,000 7 b. 28,500 d. 66,000 a (AICPA} 11. Joan Products uses a process cost system and sells a variety of teady-to-cook meat products. Four joint products were recovered during May, 2011, as follows: Ham 1,000 kilos Bacon 9,000 kilos Salami 300 kilos 5,000 kilos Sausage .. Costs incurred up to the split-off point were: P20,000 for direct materials, P15,000 for direct labor, and P7,000 for factory overhead applied. Using the physical output method, how much joint cost would product Ham absorb? a. P1,290 Cc. P2,260 0 « d. . 2710 : b. 1,420 (Adapted) uring Corporation recovers three products, X, Y, and Z, from 12. Byrd Manufacturing Assis for May, 2011 total P250,000, Other information ajoint process. are shown below: Costs After __ Ultimate Units Split-Off_ — SMkt. Value 3,000 P50,000 P150,000 Product X 4,000 75,000 275,000 Product Y 3,000 125,000 225,000 Product Z966 Chapter 1g Daves i f joint costs allocation, deter, ing the average unit cost method of j . determine el cost of producing joint products X, Y,.and Z, respectively. P100,000; P150,000; and P250,000 200,000; and P 187,500 175,000; and P200,000 P137,500; P200,000; and P225,000 goo0 (Adapteg) . Victor Corp. produces V-1, V-2, and V-3 from a common Process, ang allocates joint costs on the basis of relative sales value at split-off, V-1 V-2 V-3 50,000 40,000. 10,000 P420,000 P270,000 —_—Pé0,000 88,000 30,000 12,000 538,000 320,000 78,000 Units produced .. Sales value at split-off .. Further processing cost: Sales value, if processed further If joint costs are P450,000, the allocated share of V-1 is: a. P198,000 c. P252,000 b. 225,000 d. 275,000 (Adapted) |. Irish Co. recovers three Products from a joint process. in October, 2011, the joint costs amounted to P250,000. Other data follow: W-1 W-2 w-3 3,000 4,000 3,000 P 50,000 -P 75,000-P125,000 150,000 275,000 225,000 Quantities ..., After split-off costs a Ultimate market value . Using the market value method of joint cost i ion costs of Wel, W-2, and W.3, respectively, J st allocation, producti are: P100,000, P150,000, and P250,000 P112,500, P200,000, and P187,500 P125,000, P175,000, and P200,000 P137,500, 200,000, and P1 62,500 aoge (Adapted) .snarl By Products a 15. pee 201 AoStUres products A and 8 from a joint process. During units of product Aan oes atthe point of "spot were P50,000 for 4,000 Unit are P25.00 ana r2P 100.000 for 12,000 units of product B. Selling prices per -00 and P'12.50, respectively, for product A and for product B. perth fet ee joint cost allocated to product A by using the market value }000. The production cost of product B would be reported at: a. PB0,000 -c. P130,000 fone he? ror b. 90,000 d. © 140,000 V6 (Adapted) 16. Using the same information in No. 15, and assume that the joint cost allocated to Product B by using the average cost’ method was P90,000. The production cost of product A would be reported at: a. — P80,000 cc. P130,000 b. 90,000 d. 140,000 i (Adapted) 17.. Acompany manufactures products X and Y using a joint process. The joint processing costs are P10,000. Products X and Y can be sold at split-off for P12,000 and P8,000 respectively. After split-off, product X is processed further at a cost of P5,000 and sold for P21,000 whereas product Y is sold without further processing. If the company uses the net realizable value method for allocating joint costs, the joint cost allocated to X is a. P4,000 Cc. P6,000 b. 5,000 d. 6,667 (CIA) 18. Ohio Corporation manufactures liquid chemicals A and B from a joint process. Joint costs are allocated on the basis of relative sales value at split-off. It costs P4,560 to process 500 gallons of product A and 1,000 gallons a duct B to the split-off point. The sales value at split-off is P10 per as product A and P14 for product B, Product B requires an additional gallon for Pod off al a cost of PI per gallon before it.can be sold. aeons cost to produce 1,000 gallons of product B? c. + P4,040 eI eee d. 4,360 E . (AICPA)Joint and By-Products 977 45. 46. 47. 48. 49. Earl Corporation, which manuf ives rise to a by- i lactures a product that give: . product called “Zafa", The only costs associated with Zafa are selling costs of Pl for each unit sold. Earl accounts for Zafa sales first by deducting its separable Costs from such sales, and then by deducting this net amount from cost of sales of the maj i unit of Zafa were sold at PA each, major product, This year, 1,000 If Earl changes its method of accounting for Zata sales by showing the net amount as additional sales revenue, Earl's gross margin would a. Beunaffected c. Decrease by P3,000 b. Increase by P3,000 d. Increase by P4,000 (AICPA) Using the same information in No. 45, and Earl changes its method of accounting for Zafa sales by showing the net amount as other income, Earl's gross margin will a. Beunatfected c. Decrease by P3,000 b. Increase by P3,000 d. Decrease by P4,000 (AICPA) Using the same information in No. 45, and Earl records te net realizable value of Zafa as inventory as it is produced, what will the per unit value be? a. Pl cc. PB b. 2 ad 4 (Adapted) Using the same information in No. 45, and Earl sold 1,000 units of Zafa. Assuming that 1,500 units were produced for the year and that net realizable value is recorded as inventory, Earl's net income will increase by: a. P6,000 cc. P3,000 b. 4,500 d. 1,500 (Adapted) information in No. 45, and Earl records Zafa inventory at Glue as it is produced this year, what will be the profit year on a sale of 500 units? Using the same net realizable v' recognized next c. P1,000 a., PO d. 1,500 500 7 (Adapted)a , Brandy, Inc. make. : 4 proeess, For the monty? Products, Wet and Dry, from a joint operating P(20,00 dnd the May, 2011, the totaljoint costs of processing was | Costs fi i ‘ elow: ; Wet Dry Units after Split-off 1,600 =F to. Sales price Per unit. Further processing cosis Pio0c00 Piao ano P100,000_- P140,000 The company uses the net realizable value method for allocating the joint : costs of processing, For the month joi ferpioductWenecs nth of May, 2011, the joint costs allocated a. P60,000 c. P7200 b. . 66,000 - de 80,000 (Adapted) 5. Gone Company manufactures three 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 P200,000. Conversion costs are to be allocated to the products on the basis of market values, while materials were based on units produced. i hich does not require T the products salable, further processing w! ; additional vow materials was done at the following costs: P30,000 Product R .. apace Product S zon Product T The unit selling prices are: - Product R. 10 Product S i Product The unit cost of Product R Is: 2 Pies 7. a. . S P00 (PhICPA)