A Chemical Company manufactures joint products Pep and Vim, and a by-product Zest. Costs are assigned to the joint products by the market value method, which considers further processing costs in subsequent operations. For allocating cost to the by-product, the market value or reversal cost method is used. Total manufacturing costs for 10,000 units were P172,000 during the quarter. Production and cost data follow:

	PEP	VIM	ZES
Units Produced	5,000	4,000	1,000
Sales price per unit	50.00	40.00	5.00
Further processing cost per unit	10.00	5.00	0.00
Selling & Adm. Expense per unit.	0.00	0.00	2.00
Operating Profit	0.00	0.00	1.00

EXPLAIN HOW TO GET THESE ANSWER! SHOW SOLUTION PLEASE!!!

1. The gross profit for Pep is? ANSWER: 100,000

2. The value of Zest to be deducted from the joint cost is? ANSWER:2,000