RARA Products manufactures three products, R, S, and T, in a joint process. For every ten kilos 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. To make the products saleable, further processing which does not required additional raw materials was done at the following costs:

ProductFurther Processing CostSelling Price

RP 30,000P 10.00

SP 20,000P 12.00

TP 30,000P 15.00

Required:

1. Compute for the a) allocated material cost using output method and also for the

b) allocated conversion cost using estimated realizable value method.

c)table showing sales value, allocated joint cost, separate cost, gross profit, selling and admin expenses, and net profit. Selling and administrative expenses is 20% of sales.

d) If only 20,000 units of product R are sold, compute for the net profit for Product R

Remember if there is additional processing cost and you are given only one selling price, this

represents the ultimate selling price.