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ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units, method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product 90,000 By-Product Monthly output in Kilos. Selling price per Kilo. Separable process costs.. 150,000 60,000 P30 P14 P2 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units method to allocate joint production costs would be:

ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units, method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product 90,000 By-Product Monthly output in Kilos. Selling price per Kilo. Separable process costs.. 150,000 60,000 P30 P14 P2 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units method to allocate joint production costs would be:

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 12E: Adirondack Bat Co. processes rough timber to obtain three grades of lumber, A, B, and C that are...
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ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product Monthly output in Kilos.. Selling price per Kilo.. Separable process costs. By-Product 60,000 P2 90,000 P30 150,000 P14 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units, method to allocate joint production costs would be:
Transcribed Image Text:ABC Company produces two main products and a by-product out of a joint process. The ratio of output quantities to input quantities of direct material used in the joint process remains consistent from month to month. ABC employs the physical units method to allocate joint pro- duction costs to the two main products. The net realizable value of the by-product is used to reduce the joint production costs before the joint costs are allocated to the main products. Da- ta regarding ABC's operations for the current month are presented below. During the month, ABC incurred joint production costs of P2,520,000. The main products are not mar- ketable at the split-off point and, thus, have to be processed further. First Main Product Second Main Product Monthly output in Kilos.. Selling price per Kilo.. Separable process costs. By-Product 60,000 P2 90,000 P30 150,000 P14 P540,000 P660,000 The amount of joint production cost that ABC would allocate to the Second Main Product by using the physical units, method to allocate joint production costs would be:
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