P50 5. MERGE Inc. manufactures ZEN product from a process that yields a by-product called YAN. The by-product requires additional processing costs of P30,000. The by-product will require selling and administrative expenses totalling P20,000. It is MERGE's accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during the year ended December 31, 2016 follows: Product Units Produced Market Value at Split Off Units Sold ZEN 100,000 60,000 YAN 8,000 P10 8,000 The joint costs incurred up to split-off point are: Direct materials P2,000,000 Direct labor 800,000 Factory overhead 200,000 The selling and administrative expense of MERGE Inc. for the year ended December 31, 2016 is P1,000,000 exclusive of that for the by-product. 1. What is the gross profit for the year if the net revenue from by-product is presented as other income? a. 1,200,000 b. 1,230,000 c. 1,218,000 d. 1,118,000 2. What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue? a. 1,230,000 b. 1,200,000 C. 1,218,000 d. 1,118,000 3. What is the net income for the year if the net revenue from by-product is presented as additional sales revenue? a. 200,000 b. 218,000 c. 230,000 d. 118,000 4. What is the net income for the year If the net revenue from by-product is presented as deduction from the total manufacturing costs of the main product? a. 218,000 b. 200,000 c. 230,000 d. 118,000