Solution-Calculate the adjusted joint cost for allocation

Calculate the adjusted joint cost for allocation for August

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Reference no: EM132746199

Question - Maroon Ltd is a company that produces chemicals for the cleaning industry. One of its processes manufactures join products Y and Z, and by-product X. The company uses the net realizable value of its joint products to allocate joint production costs. The by-product is valued for inventory purposes at its market value less its disposal cost, and this value is used to reduce the joint production cost of P2,015,000. Information regarding the company's August 2020 operations are presented below:

In liters	Y	Z	X
Finished Goods inventory, August 1	30,000	100,000	40,000
August Sales	1,340,000	760,000	240,000
August Production	1,600,000	800,000	200,000
In Peso
Further Processing cost	1,400,000	1,520,000
Final Sales value per Liter	10	14
Sales value per liter at split off			2.40
Disposal Cost per liter			0.40

Required -

1. Calculate the by-product income.

2. Calculate the adjusted joint cost for allocation for August.

3. Calculate the allocation of joint cost for August for products Y and Z.

4. Calculate the unit cost per product and value of closing inventory.

5. The company has an opportunity to sell product Z at split off for P10 per liter. Prepare an analysis to show whether Z should be sold at split off point or further processing.

6. Split your joint costs between joint products using physical unit method.

Reference no: EM132746199

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Calculate the adjusted joint cost for allocation for August

Reference no: EM132746199

Reference no: EM132746199

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