Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Nangangamatis Inc. manufactures tomato products such as tomato juice, tomato paste, tomato sauce and also sells tomato peels and seeds (P&S) as a by-product. Nangangamatis

Nangangamatis Inc. manufactures tomato products such as tomato juice, tomato paste, tomato sauce and also sells tomato peels and seeds (P&S) as a by-product. Nangangamatis uses actual costing and the weighted average cost flow assumption. Production process begins in Department 1 wherein the tomato juice, sauce, and paste are manufactured in approximate proportions of 20%, 30%, and 50%, respectively. All three products are readily saleable at split-off point; however, management opts to process tomato sauce in Department 2, wherein further processing creates a residue mixture of P&S. Tomato paste may also be further processed in Department 3 if incremental profit can be obtained. The following is an excerpt from Department 1's current period cost of production report: DM DL OH Units accounted for Comp & trans out 250,000.00 100% 100% 100% Normal spoilage 20,000.00 100% 50% 50% WIP end - Total 270,000.00 Cost per EUP 7.50 5.00 12.00 Department 1 % of completion Additional marketing, distribution, and processing costs of Php0.75 per unit are necessary for P&S. The following is an excerpt from Department 2's current period cost of production report: DM DL OH Units* to account for WIP beginning 15,000.00 100% 20% 20% Transferred in this period 75,000.00 Total 90,000.00 Units* accounted for Comp & trans out 70,000.00 100% 100% 100% Normal spoilage 15,000.00 100% 60% 60% Abnormal spoilage 5,000.00 100% 60% 60% Total 90,000.00 Total costs to account for 2,057,000.00 540,000.00 697,000.00 820,000.00 Less: P&S NRV (Php2/unit) (120,000.00) Department 2 % of completion *Liters of tomato sauce. By-product units are not accounted for in CPR. In the previous period, Department 3 manufactured 80,000 units of refined tomato paste at the following costs: Trans-in - Php1,879,000; DM - Php1,372,000; DL - Php343,000; OH - Php1,029,000. Total costs accounted for in Department 3 amounted to Php4,623,000. Cost-output relationships are expected to stay at the same level. Tomato juice can be sold for Php54.50 per unit. Basic tomato sauce can be sold for Php43 per unit while refined tomato sauce sells for Php90 per unit. Basic tomato paste can be sold for Php37 per unit while refined tomato paste sells for Php68.50 per unit. REQUIRED: Prepare joint cost allocations based on 1) physical units, 2) sales value at split-off, 3) approximate NRV at split-off, 4) constant gross-margin % NRV

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Horngrens Accounting

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann Johnston, Peter R. Norwood

11th Canadian Edition Volume 2

0135359783, 978-0135359785

More Books

Students also viewed these Accounting questions

Question

1. Build trust and share information with others.

Answered: 1 week ago