JOINT AND BY-PRODUCT
PROBLEM 1
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 off
2.40
Disposal Cost per liter
0.40
Calculate the unit cost per product and value of closing inventory for product Y (round off to whole number if rounding off is needed)
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