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Safe Company produces transparentsoaps, Glycerin soaps as joint products and liquid soaps as a by-product. The bottled liquid soaps can be sold for P2 per liter. Liquid soaps require packaging costs of P0.10 per liter and sales commissions at 10% of sales price. The net revenue of the by-product is treated as a reduction from the joint costs. Joint products are assigned joint costs based on the amount liters produced.
Transparent soaps 320,000 liters
Glycering soaps 160,000 liters
Liquid soaps 1,600 liters
Joint costs P80,000
Problem 1: What is the cost assigned to transparent soaps?
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