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Question - The Burns Company produces two joint products, X and Y. In separating products X and Y, a by-product is also produced. During the month of July, 20,000 gallons of input were processed producing 12,000 gallons of X, 7000 gallons of X, and 7,000 gallons of Y and 1,000 gallons of the by-product. The materials and conversion costs incurred to process and separate the products amounted to P 57,000. The following were taken from the books for the month of July.
Product
Additional processing cost
Sales price
Sales unit
X
P .50/ gallon
P 6.50
10,000
Y
P .75/ gallon
5.50
5,000
Z
P .10/ gallon
2.00
700
Using the physical measure to allocate joint costs, what is the total manufacturing costs per unit for X, assuming that the by-product is valued at zero cost at the split - off point?
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