Reference no: EM132794432

Family Inc. manufactures four products E, L, C, M in a joint process. Every 10 kilos of raw materials, the output is 4 kilos of E, 3 kilos of L, 1.5 of C, and 1,5 kilos of M. During the first month of operation, 40,000 kilos of raw materials costing P115,000 were placed into production, this is to be allocated based on units of outputs. Conversion costs of P200,000 were also spent, which is to be allocated on the basis of their market values.

                Further Processing Costs           Selling Price per Unit

Item E            P28,000                                P15
Item L           25,000                                 12
Item C             23,000                              10
Item M            22,000                                   9

Problem 1: How much is the net income of Item L assuming operating expense are 20 percent of sales price?