Turn-return Company manufactures joint products 1 and 2 as well as by-product 3. Cumulative joint cost data for the period show P204,000, representing 20,000 completed units processed through the refining department at an average cost of P10.20. Costs are assigned to 1 and 2 by the market value method, which considers further processing costs in subsequent operations. To determine the cost allocation to by-product 3, the market value (reversal cost) method is used. Additional data: By-product 3 Product 1 Product 2 Quantity processed 2,000 units 8,000 units 10,000 units Sales price per unit P6.00 P20.00 P25.00 Further processing cost per unit 2.00 5.00 7.00 Marketing and administrative expenses per unit 1.00 Operating profit per unit 1.00 Required: a. Calculate manufacturing cost before separation for by-product 3. b. Determine the allocated joint cost to products 1 and 2. c. Determine the total production cost of the three products. d. Prepare an income statement, detailing sales and costs for each product.
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