Exercise 8-3. JOINT COST ALLOCATION - HYPOTHETICAL MARKET VALUE METHOD JC Company manufactures three different products from a single raw material. A summary of production costs shows: Product Product Product Total B A Y Output in kgs 80,000 200,000 160,000 440,000 Selling price/ kg P0.75 P1.00 P1.50 Costs: Product Product Product Total B A Y Cost Materials -0- -0- -0- P90,000 Direct Labor P 3,000 P20,000 P30,000 80,000 Variable FOH 2,000 10,000 16,000 45,000 Fixed FOH 15,000 34,000 30,000 115,000 All separable costs have been assigned to products but the joint cost has not been allocated. All of the year’s output was sold. Compute for the total cost for each product, allocating the joint cost by the market value method.
Exercise 8-3. JOINT COST ALLOCATION - HYPOTHETICAL MARKET VALUE METHOD
JC Company manufactures three different products from a single raw material. A summary of
production costs shows:
Product Product Product Total
B A Y
Output in kgs 80,000 200,000 160,000 440,000
Selling price/ kg P0.75 P1.00 P1.50
Costs:
Product Product Product Total
B A Y Cost
Materials -0- -0- -0- P90,000
Direct Labor P 3,000 P20,000 P30,000 80,000
Variable FOH 2,000 10,000 16,000 45,000
Fixed FOH 15,000 34,000 30,000 115,000
All separable costs have been assigned to products but the joint cost has not been allocated. All of
the year’s output was sold. Compute for the total cost for each product, allocating the joint cost by
the market value method.
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