9 minutes Problem 1) Midwest Clothing produces three products (precut fabrics for hats, shirts, and pants)...
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9 minutes Problem 1) Midwest Clothing produces three products (precut fabrics for hats, shirts, and pants) from a joint process. Joint cost is allocated on the basis of relative sales value at split-off. Rather than sell the products at split-off, the company has the option to complete each of the products. Information related to these products is shown below: Number of units produced Total 16,000 Hats Shirts Pants 5,000 8,000 3,000 Joint cost allocated P87,000 ? ? P180,000 Sales values at split-off point ? ? P40,000 P300,000 P10,000 P39,000 P62,000 P150,000 P134,000 Additional costs of processing further P13,000 Sales values after all processing P105,000 P389,000 a. What amount of joint cost should be allocated to the Shirts and Pants products? b. What are the sales values at split-off for Hats and Shirts? c. Which products should be processed further? Show computations. d. If 4,000 Shirts are processed further and sold for P67,000, what is gross profit on the sale? 9 minutes Problem 1) Midwest Clothing produces three products (precut fabrics for hats, shirts, and pants) from a joint process. Joint cost is allocated on the basis of relative sales value at split-off. Rather than sell the products at split-off, the company has the option to complete each of the products. Information related to these products is shown below: Number of units produced Total 16,000 Hats Shirts Pants 5,000 8,000 3,000 Joint cost allocated P87,000 ? ? P180,000 Sales values at split-off point ? ? P40,000 P300,000 P10,000 P39,000 P62,000 P150,000 P134,000 Additional costs of processing further P13,000 Sales values after all processing P105,000 P389,000 a. What amount of joint cost should be allocated to the Shirts and Pants products? b. What are the sales values at split-off for Hats and Shirts? c. Which products should be processed further? Show computations. d. If 4,000 Shirts are processed further and sold for P67,000, what is gross profit on the sale?
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