Reference no: EM132999093

Question -

1. Red Horse, Inc. a small beer brewery. The beer is processed in a single brewery into light beer, dark beer, and an impure byproduct. There were no beginning inventories or work-in-process on December. The production costs of Red Horse, Inc. for December are presented below:

Costs:

Materials acquired and placed in production P 5,000,000

Direct labor 2,000,000

Factory overhead 3,000,000

Production and sales information:

a. Light beer 300,000 cases produced; 80,000 cases sold at P 20 each.

b. Dark beer 240,000 cases produced; 120,000 cases sold at P 15 each.

c. Impure byproduct 120,000 cases produced and sold at P 15 each.

The portion of joint production costs assigned to dark beer based on the physical output would be:

a. P 7,500,000

b. P 3,750,000

c. P 3,636,000

d. P 1,818,000

2. The portion of joint production costs assigned to light beer based on the relative sales value of output would be

a. P 4,800,000

b. P 4,000,000

c. P 2,500,000

d. P 2,286,000

3. Sonimad Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support braces (MSB) and unseasoned commercial building lumber (CBL). A standard production run incurs joint costs of P 300,000 and results in 60,000 units of MSB and 90,000 units of CBL. Each MSB sells for P 2 per unit, and each CBL sells for P 4 per unit. Assuming no further processing work is done after the split off point, the amount of joint costs allocated to commercial building lumber (CBL) on a physical quantity allocation basis would be:

a. P 75,000

b. P 180,000

c. P 225,000

d. P 120,000

4. If a company obtains two salable products from the refining of one ore, the refining process should be accounted for as a(n)

a. Mixed joint process

b. Joint process

c. Extractive process

d. Reduction process