Problem 4

Marthas Meat Corporation uses a process cost system and sells a variety of cooked meat, skins and cuttings. Four joint products produced out of the process are as follows:

PRODUCTS	AMOUNT PRODUCED
Lit-tid	1,000
Tad-yang	9,000
Pang-a	400
Soup No.5	5,100

The split off point for these products occurs in Division B and the costs incurred up to this point are P20,000 for direct materials, P15,000 for direct labor, and P7,000 for Factory overhead.

What are the joint costs allocated to tad-yang by using the physical output method for Lit-tid and Tadyang respectively?

Problem 5

Ilang Ilang company manufactures Products A and B from a joint process which also yields a by-product. Ilang ilang accounts for the revenue from its by-product sales as a deduction from the cost of goods sold of its main products. Additional information follows:

	A	B	C	Total
Units produced	15,000	9,000	6,000	30,000
Joint Costs	?	?	?	264,000
Sales Value at Split off	290,000	150,000	10,000	450,000

Joint products are allocated using the relative sales value at split off approach

What was the joint cost allocated to Product B?

Problem 6

Lucille Inc manufactures a product that gives rise to a by-product called Robon. The only cost associated with Robon are additional processing cost of P1.00 for each unit. Lucille accounts for Robon sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. For the past year, 2,000 units of Robon were produced which were sold for P3.00 each.

Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively.

requirement

If Lucille changes its method of accounting for Roblon sales by showing the net amount as other income, the effect on gross margin would be (increase of decrease of what amount?)

Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively. The gross margin after considering the by-product sales and costs would be