Question
Maha Company manufactures three products, R, S, and T, in a joint process. For every ten kilo of raw materials input, the output is five
Maha Company manufactures three products, R, S, and T, in a joint process. For every ten kilo of raw materials input, the output is five kilos of R, three kilos of S, and two kilos of T.
During August, 50,000 kilos of raw materials costing P120,000 were processed and completed, with joint conversion costs of P200,000. Conversion costs are to be allocated to the products on the basis of market values, while materials were based on units produced.
To make the products salable, further processing which does not require additional raw materials was done at the following cost:
Product R P30,000
Product S 20,000
Product T 30,000
The unit selling prices are:
Product R P10
Product S 12
Product T 15
REQUIREMENT:
a. Compute the unit cost of Product R.
b. Assume all units are considered sold, compute the gross profit on sales for Product S.
c. Assume all units of Product T are sold, and selling and administrative expenses are 20% of sales, compute the net income from the sale of Product T.
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