Problem 14: Accounting of By-Product Midnight Oil Corporation manufactures Max product from a process that yields a by-product called YAN. The by-product requires additional processing cost of P30,000. The by-product will require selling and administrative expenses totaling P20,000. It is Midnight Oil'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 Max YAN Units Produced 100,000 8,000 Market Value at Split Off P50 P10 Units Sold 60,000 8,000 The joint costs incurred up to split-off point are: Direct materials Direct labor Factory overhead P2,000,000 800,000 200,000 02 The selling and administrative expense of Midnight Oil Corporation for the year ended December 31, 2016 is P1,000,000 exclusive of that for the by-product. Required: Compute the following: 1. What is the gross profit for the year if the net revenue from by-product is presented as other income? 2. What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue? 3. What is the net income for the year if the net revenue from by-product is presented as a deduction from the cost of goods sold? 4. What is the net income for the year if the net revenue from by-product is presented as a deduction from the total manufacturing cost of the main product?