Solution-Compute the allocated joint cost of b product

Compute the allocated joint cost of b product

Assignment Help Accounting Basics

Reference no: EM133179492

Question - Ted runs a fruit packing business in Central Cebu. The firm buys peaches by the truckload in season and separates them into three categories: A, B, and C. A can be sold as-is to supermarket chains and specialty gift stores. B is sliced and canned in light syrup and sold to supermarkets. C is considered a by-product and is sold to DEF Company, which processes in to jelly.

Ted has two processing departments (1) Cleaning and Sorting (joint cost) and (2) Cutting and Bottling (separate costs). During the month, the company incurred a joint cost of P15,450. The following yield, costs, and final sales value resulted from the month's truckload of fruit. (Round off to the nearest whole number for your final answer)

	A	B	C
Yield in units	1,500	2,000	500
Cutting and bottling costs	0	P2,000	P0
Total packaging and delivery costs	P1,500	P2,200	P500
Total Final sales value	P30,000	P15,000	P4,500

Required -

1. Compute the allocated joint cost of the C product, using the approximated NRV at the split-off method, assuming the by-product is recorded when realized and is shown as Other Income on the income statement.

2. Compute the allocated joint cost of B product using the approximated NRV at split-off method, assuming the by-product uses the reversal cost method.

Reference no: EM133179492

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Compute the allocated joint cost of b product

Reference no: EM133179492

Reference no: EM133179492

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