Additional processing costs are entirely variable and

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processed further. Additional processing costs are entirely variable and are traceable to the respective products produced. Total joint costs incurred amounted to P50,000. Units Sales Value If processed further Product Produced At Split-off Additional cost Sales Value W 20,000 P45,000 P20,000 P60,000 X 15,000 P75,000 P20,000 P98,000 Y 15,000 P30,000 P16,000 P62,000 Requirements: A. Allocate joint costs and compute for the total cost using: 1. Market value at split-off point 2. Hypothetical market value method (assuming sales value at split-off point is not given) MULTIPLE CHOICE Lee Co. produces two joint products, Bex and Rom. Joint production costs for June 2001 were P30,000.  During June 2001, further processing costs beyond the split-off point needed to convert the products into  salable form, were P25,000 and P35,000 for 1,600 units of Bex and 800 units of Rom, respectively. Bex  sells for P50  per unit, and Rom sells for P100 per unit. Lee uses the net realizable value method for  allocating joint product costs. 
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1. For June 2001, the joint costs allocated to product Bex were a. P20,000 b. P16,500 c. P13,500 d. P10,000 Life Co. manufactures products X and Y from a joint process that also yields a by-product, Z. Revenue  from sales of Z is treated as a reduction of joint costs. Additional information is as follows: PRODUCTS     X     Y     Z TOTAL Units produced 20,000 20,000 10,000 50,000 Joint costs      ?      ?      ? P262,000 Sales value at split-off P300,000 P150,000 P10,000 P460,000 Joint costs were allocated using the sales value at split-off method.  2. The joint costs allocated to product X were Alpha Corp. manufactures a product that yields the by-product “Yum”. The only costs associated with  Yum are selling costs of P.10 for each unit sold. Alpha accounts for sales of Yum’s separable costs from  Yum’s sales, and then deducting this net amount from the major product’s cost of goods sold. Yum’s  sales were 100,000 units at P1.00 each. 3. If Alpha changes its method of accounting for Yum’s sales by showing the net amount as  additional sales revenue, then Alpha’s gross margin would  Bravo Company manufactures product J and K from a joint process. For product J, 4,000 units were  produced having a sales value at split-off of P15,000. If product J were processed further, the additional  costs would be P3,000 and the sales value would be P20,000. For product K, 2,000 units were produced  having a sales value at split-off of P10,000. If product K were processed further, the additional costs  would be P1,000 and the sales value would be P12,000. 
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