Maroon Ltd is a company that produces chemicals for the cleaning industry. One of its processes manufactures join products Y and Z, and by-product X. The company uses the net realizable value of its joint products to allocate joint production costs. The by-product is valued for inventory purposes at its market value less its disposal cost, and this value is used to reduce the joint production cost of P2,015,000. Information regarding the company's August 2020 operations are presented below:

  In liters                                                             Y                       Z                             X

 Finished Goods inventory, August 1     30,000               100,000                40,000

 August Sales                                          1,340,000           760,000               240,000

 August Production                                 1,600,000          800,000               200,000

 In Peso

 Further Processing cost                        1,400,000       1,520,000

 Final Sales value per Liter                            10                    14

Sales value per liter at split off                                                                             2.40

Disposal Cost per liter                                                                                           0.40

  

Required:

1)     Calculate the by-product income

2)     Calculate the adjusted joint cost for allocation for August

3)     Calculate the allocation of joint cost for August for products Y and Z

4)     Calculate the unit cost per product and value of closing inventory

5)     The company has an opportunity to sell product Z at split off for P10 per liter. Prepare   an analysis to show whether Z should be sold at split off point or further processing.

6)     Split your joint costs between join products using physical unit method.

Answer rating: 100% (QA)

Solutions for Maroon Ltds Joint Costing Problem 1 Byproduct Income Market value Disposal cost 24 04 ... View the full answer