Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In the third department of a company, a portion of the materials (a by-product) is removed, further processes and sold. The company uses reversal cost

In the third department of a company, a portion of the materials (a by-product) is removed, further processes and sold. The company uses reversal cost method to account for the by-product. Data for May follow:

Amount of by-product removed 2,000 units

Estimated sales price of by-product after further processing. Php 1.20/unit

Estimated processing cost after separation, Php 0.30/unit

Estimated selling expenses, 10% of sales price

Estimated normal profit margin, 5% of sales price

What is the gain (or loss) on sale of by-product if all the units are sold at Php 1.50?

What is the total cost of the by-product?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

First we need to calculate the estimated total revenue and gross margin of the byproduct Estimated t... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Advanced Accounting In Canada

Authors: Hilton Murray, Herauf Darrell

7th Edition

1259066487, 978-1259066481

More Books

Students also viewed these Accounting questions

Question

Differentiate 3sin(9x+2x)

Answered: 1 week ago

Question

Compute the derivative f(x)=(x-a)(x-b)

Answered: 1 week ago