In Department III of SAMCIS Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated processing cost after separation is P0.30 per unit and estimated selling expenses is 10% of the sales price. The estimated profit margin is 5% of the sales price. What is the total cost of the by-product?
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Problems 8 - By Products
Problem 8 - In Department III of SAMCIS Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated
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- Problem 8 - In Department III of SAMCIS Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated processing cost after separation is P0.30 per unit and estimated selling expenses is 10% of the sales price. The estimated profit margin is 5% of the sales price. What is the total cost of the by-product? Problem 9 - Using the above data in Problem 8, what is the gain (loss) on sale of the by-product if all of the units are sold at P1.50?Problem 8 - In Department III of SAMCIS Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated processing cost after separation is P0.30 per unit and estimated selling expenses is 10% of the sales price. The estimated profit margin is 5% of the sales price. What is the total cost of the by-product?Exercise 8-8. JOINT COST ALLOCATION & BYPRODUCT ALLOCATION – MARKET VALUE METHOD The BAR Company manufactures joint products A and R as well as byproduct B. Cumulative cost data for the period show P204,000 representing 20,000 completed units processed through the Refining Department at an average cost of P10.20. Costs are assigned to A and R by the market value method which considers further processing costs in subsequent operations. To determine the cost allocation to B, the market value (reversal cost) method is used. Additional data: B A R Quantity processed 2,000 8,000 10,000 Sales price per unit P 5.00 P20.00 P25.00 Further processing cost per unit 1.00 5.00 7.00 Selling and general expenses per unit 1.00…
- Exercise 8-6. BYPRODUCT COSTING AND ENTRIES Gee Company produces a product known as G-on. In the manufacture of this chemical, a byproduct results which can be sold as is for P25 per kilogram or be processed further and sold for P60 per kilogram. The additional processing for each kilogram of byproduct requires P10 for materials, P12 for labor and P11 for factory overhead. Production costs of the main product to the point of separation were: materials, P11,100,000; labor, P9,050,000; and factory overhead, P7,570,000. During the month, 170,000 kilograms of G-on and 26,000 kilograms of byproduct were produced. REQUIRED: Prepare journal entries for the byproduct when it is: Stored without assigning it any cost and later sold on account at P25 per kilogram, with no additional costs incurred Stored and with cost at P25 per kilogram, reducing the main product cost by the amount allocated to the byproduct Further processed and stored, with no cost prior to separation allocated to it…Problem 8-52 (Static) FIFO Method (LO 8-5) The following information is available from the Oils Division of Glasgow Corporation for December. Conversion costs for this division were 80 percent complete as to beginning work-in-process inventory and 50 percent complete as to ending work-in-process inventory. Information about conversion costs follows. Units Conversion Costs WIP at December 1 (80% complete) 20,000 $ 232,200 Units started and costs incurred during December 108,000 1,306,800 Units completed and transferred to next department during December 80,000 ? The Oils Division uses FIFO. Required: a-1. Compute the equivalent units for conversion costs. a-2. Compute the cost per equivalent unit for conversion costs. a-3. What was the conversion cost of work-in-process inventory in the Oils Division at December 31? b. What were the conversion costs per equivalent unit produced last period and this period, respectively?Exercise 8-7. REVERSAL COST METHOD FOR BY-PRODUCTS RC Inc. manufactures one main product and two by-products. Data for July of the current year follow: Main By product Byproduct Product A B Sales P150,000 P 12,000 P 7,000 Manufacturing cost 75,000 - - before separation Manufacturing cost 23,000 2,200 1,800 after separation Selling and general 12,000 1,500 1,100 expenses REQUIRED: An income statement, assuming no beginning or ending inventories and using the reversal cost method for the by-products, allowing a 15% operating profit for Byproduct A and 12% operating profit for Byproduct B.
- QUESTION 2 A company manufacture it main product in two different consecutive processes, process 1 and process 2. The output from process 1 is transferred to process 2 the output of process 2 is sent to the packaging department. Information for the week ended 31 August 2009 is as follows; Process 1 Input Material X 18,00kg @ GH¢1 per kg Material Y 12,000 kg @ GH¢2 per kg Labour 1,720 hours @ GH¢3 per hour Normal loss 5% of input Sales price of scrap GH¢0.32 per kg Output 27,000 kg There was no opening stock but 600 kg of closing work in progress in process 1 at the end of the week which is estimated to be 60% complete with regard to conversion cost. Process 2 Input Material P 19,800 kg @ GH¢2.5 per kg Material Y 12,600 kg @ GH¢1.5 per kg Additives GH¢1,800 Labour 1,480 hours @ GH¢3 per hour Normal loss 5% of input Output 56,000 kg There was no opening WIP but there 3,000 kg in process 2 at the end of the week which is estimated to be 50% complete with…Problem 4 - Average with Lost Units The Salty Mgf. Co. operates three producing departments A, B and C. It uses the weighted average costi8ng method . The following data are on the production of Department B for October, 2021: Added in Department B Units Transfer in Materials Conversion (in Pesos) (in Pesos) Cost (PhP) In process, Oct. 1 5,000 9,990 1,020 998 Received from Department A 20,000 39,010 21,855 21,877 Total 25,000 Transferred out 19,000 Normal Loss…Question 7.2 Chemical X, Inc. processes pine rosin into three products; turpentine, paint thinner, and spot remover. During June the joint costs of processing were $280,000. Production and sales value information for the month were as follows: Product Units Produced Sales Value at Splitoff Point Turpentine 3,000 litres $30,000 Paint thinner 3,000 litres 25,000 Spot remover 1,500 litres 12,500 Required: Determine the amount of joint cost allocated to each product if the physical measure method is used.
- Exercise 6-7. UNEVEN APPLICATION OF COST Zay Corporation manufactures a product in two departments, Cutting and Assembly. During February, the Assembly department received 2,100 units from the Cutting department and 2,000 units were transferred out of the Assembly department to finished goods. At the end of the month, 500 units were still in process, they were 80% complete as to materials and 60% complete as to conversion cost. Cost data related to February operations follow: Costs charged to the dep’t Beg. Invty Added this Period Costs from preceding Dep’t P11,800 P63,200 Materials 4,000 21,200 Direct labor 1,200 17,660 Factory Overhead 2,400 35,320 Required: Prepare the February cost of production report for the Assembly Dep’t.In Department III of SAMCIS Company, a portion of the materials (a by-product) is removed further processed and sold. The Company uses the reversal cost method to account for the by-product. Data for June include: Amount of by-product removed is 2000 units; Estimated sales price of by-product after processing further is P1.20/unit. Estimated processing cost after separation is P0.30 per unit and estimated selling expenses is 10% of the sales price. The estimated profit margin is 5% of the sales price. 1. What is the total cost of the by-product? 2. what is the gain (loss) on sale of the by-product if all of the units are sold at P1.50?Problem 8-63 (Algo) Solving for Unknowns: FIFO Method (LO 8-4, 5) For each of the following independent cases, use FIFO costing to determine the information requested. Required: a) At the start of the period, 3,700 units were in the work-in-process inventory; 3,100 units were in the ending inventory. During the period, 9,600 units were transferred out to the next department. Materials and conversion costs are added evenly throughout the production process. FIFO costing is used. How many units were started during this period?b. Beginning inventory amounted to 1,100 units. This period, 4,600 units were started and completed. At the end of the period, the 3,200 units in inventory were 40 percent complete. Using FIFO costing, the equivalent production for the period was 6,100 units. What was the percentage of completion of the beginning inventory?c. The ending inventory included $81,900 for conversion costs. During the period, 41,300 equivalent units were required to complete the…