Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10. If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha. a. P42,000 b. P18,000 c. P12,000 d. P38,000
Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10. If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha. a. P42,000 b. P18,000 c. P12,000 d. P38,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 10CE: A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each...
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Integrity Company manufactures two products, Alpha and Beta from a joint process. One production run costs P20,000 and results in 3,000 units of Alpha and 4,000 units of Beta. Neither product is salable at split-off but must be processed further such that the separable cost for Alpha is P10 per unit and for Beta is P5 per unit. The eventual market price for Alpha is P20 and for Beta, P10.
If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.
If the company uses the constant gross margin approach in allocating joint cost to joint products, determine the total cost of product Alpha.
a. P42,000
b. P18,000
c. P12,000
d. P38,000
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