Question
La Loma Company produces four solvents from the same process: Wan, Tu, Tri, Por. Joint production costs are as follows: Materials P4, 000; Labor P3,
La Loma Company produces four solvents from the same process: Wan, Tu, Tri, Por. Joint production costs are as follows: Materials P4, 000; Labor P3, 000; Overhead- P2, 000 Barrels Sales price per barrel at split- off Disposal cost per barrel at split- off Further processing costs Final sales price per barrel Wan 750 P10 P6.50 P2.00 P13.50 Tu 1, 000 8 4.00 2.50 10.00 Tri 4, 000 11 7.00 4.00 15.50 Por 2, 000 15 9.50 4.50 19.50 If La Loma sells the products after further processing, the following disposal costs will be incurred: C, P2.50; D, P1.00; E, P3.50; G, P6.00. (Round all answers to the nearest peso)
1. Using net realizable value at split- off, what amount of joint processing cost is allocated to Product Tri?
2. Using a physical measurement method, what amount of joint processing cost is allocated to Product Wan?
3. Using a physical measurement method, what amount of joint processing cost is allocated to Product Por?
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