Hovart Corporation, which manufactures two products out of a joint process - Compod and Ultrasene. The joint (common) costs incurred are P250,000 for a standard production run that generates 120,000 gallons of Compod and 80,000 gallons of Ultrasene. Compod sells for P2.00 per gallon while Ultrasene sells for P3.25 per gallon.

Requirements:

a) If there are no additional processing costs incurred after the split-off point, compute the amount of joint cost of each production run allocated to Compod on a physical-quantity basis.

Answer:

b) If there are no additional processing costs incurred after the split-off point, compute the amount of joint cost of each production run allocated to Ultrasene on a realizable value (gross market value) basis.

c) If additional processing costs beyond the split-off point are P0.10 per gallon for Compod and P1.10 per gallon for Ultrasene, compute the amount of joint cost of each production run allocated to Ultrasene on a physical quantity basis.

d) If additional processing costs beyond the split-off point are P0.10 per gallon for Compod and P1.10 per gallon for Ultrasene, compute the amount of joint cost of each production run allocated to Compod on a net realizable value (net market value) basis.