A factory producing P also produces a by-product Q which is further processed into a finished product. The joint cost of manufacture is given below: Material, `5,000; Labour, `3,000; and Overheads,...

A factory producing P also produces a by-product Q which is further processed into a finished product. The joint cost of manufacture is given below: Material, `5,000; Labour, `3,000; and Overheads, `2,000.

Selling prices are: P, `16,000; Q, `8,000. Estimated profits on selling prices are 25 per cent for P and 20 per cent for Q.

Assume that selling and distribution expenses are in proportion of sales price. Show how you would apportion joint costs of manufacture, and prepare a statement showing cost of production of P and Q.