Problem 14: Accounting of By-Product Midnight Oil Corporation manufactures Max product from a process that yields...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Problem 14: Accounting of By-Product Midnight Oil Corporation manufactures Max product from a process that yields a by-product called YAN. The by-product requires additional processing cost of P30,000. The by-product will require selling and administrative expenses totaling P20,000. It is Midnight Oil's accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during the year ended December 31, 2016 follows: Product Units Produced Max YAN 100,000 8,000 The joint costs incurred up to split-off point are: Direct materials Direct labor Factory overhead Market Value at Split Off P50 P10 2. 3. 4. P2,000,000 800,000 200,000 The selling and administrative expense of Midnight Oil Corporation for the year ended December 31, 2016 is P1,000,000 exclusive of that for the by-product. Units Sold 60,000 8,000 Required: Compute the following: 1. What is the gross profit for the year if the net revenue from by-product is presented as other income? What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue? What is the net income for the year if the net revenue from by-product is presented as a deduction from the cost of goods sold? What is the net income for the year if the net revenue from by-product is presented as a deduction from the total manufacturing cost of the main product? Problem 14: Accounting of By-Product Midnight Oil Corporation manufactures Max product from a process that yields a by-product called YAN. The by-product requires additional processing cost of P30,000. The by-product will require selling and administrative expenses totaling P20,000. It is Midnight Oil's accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during the year ended December 31, 2016 follows: Product Units Produced Max YAN 100,000 8,000 The joint costs incurred up to split-off point are: Direct materials Direct labor Factory overhead Market Value at Split Off P50 P10 2. 3. 4. P2,000,000 800,000 200,000 The selling and administrative expense of Midnight Oil Corporation for the year ended December 31, 2016 is P1,000,000 exclusive of that for the by-product. Units Sold 60,000 8,000 Required: Compute the following: 1. What is the gross profit for the year if the net revenue from by-product is presented as other income? What is the gross profit for the year if the net revenue from by-product is presented as additional sales revenue? What is the net income for the year if the net revenue from by-product is presented as a deduction from the cost of goods sold? What is the net income for the year if the net revenue from by-product is presented as a deduction from the total manufacturing cost of the main product?
Expert Answer:
Answer rating: 100% (QA)
A ByProduct seems to be a supplementary unit create... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
Students also viewed these accounting questions
-
During the year ended December 31, 2017, Liberty Inc. reported the following equity events: March 31, 2017 10 percent stock dividend April 15, 2017 $1 cash dividend per share June 30, 2017...
-
During the year ended December 31, 2015, Kellys Camera Shop had sales revenue of $ 170,000, of which $ 85,000 was on credit. At the start of 2015, Accounts Receivable showed a $ 10,000 debit balance...
-
During the year ended December 31, 2012, Kelly's Camera Shop had sales revenue of $170,000, of which $85,000 was on credit. At the start of 2012, Accounts Receivable showed a $10,000 debit balance,...
-
Write out the equation for the following chemical reaction and balance it. Solid potassium chlorate, KCIO3, decomposes to form solid potassium chloride and diatomic oxygen gas. What is the...
-
Thomson Companys cost and production data for two recent months included the following: Required: a. Separately calculate the rental cost per unit and the utilities cost per unit for both January and...
-
Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European juicing machines. The owner of...
-
Following are the annual amounts of rainfall, in inches, in six randomly chosen cities for two consecutive years. Can you conclude that the mean rainfall was greater in year 2 than in year 1? a. Let...
-
Epstein Engineering Inc. began operations on January 5, 2014, with the issuance of 500,000 shares of $80 par common stock . The sole stockholders of Epstein Engineering Inc. are Barb Abrams and Dr....
-
Comprehensive: Income Statement and Supporting Schedules The following is a partial list of the account balances, after adjustments, of the Silvoso Company on December 31, 2019: Depreciation Expense:...
-
Comprehensive Problem Bug-Off Exterminators December 31, 2019 Unadjusted Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies....
-
Consider the following code: module FF (Q, X, Clk, rst); output Q; input X, Clk, rst; reg Q; always @ (posedge CLK, negedge rst) if (rst = 0) Q
-
What have you learnt from the below article and summarize it? https://hbr.org/2019/02/why-great-innovation-needs-great-marketing
-
To evaluate the risk associated with a procedure, the following numbers are estimated: the severity of the problem is 10, the occurrence is 5 and the difficulty associated with detection is 9. The...
-
What differentiates commerce from marketing? What are the types of e-commerce and Marketing ?
-
Jack Corporation has a profit margin of 8.70 percent, total asset turnover of 1.40, and ROE of 18.57 percent. What is the firm's debt-equity ratio? (Hint: Use the DuPont Identity.)
-
The current price of STRIPS are as follows: Maturity Price 1 $98.255 2 $95.251 3 $91.488 Assume the annual coupons and all bonds have a par value of $100. What are the 1-, 2-, and 3-year spot...
-
Border Gin ( since Year 1 ) operates a private distillery and makes 6 different types of gin. Below is data for Years 6 and 7 . Year 6 Year 7 Bottles manufactured 2 6 2 , 5 0 0 3 0 0 , 0 0 0 Bottles...
-
XYZ Inc. a calendar year, accrual basis corporation, had the following items during 2021: Gross revenue from operations Cost of goods sold $420,000 ($180,000) $9,000 LT capital gain .LT capital...
-
Athabaska Ltd. produces a lens used for webcams. Summary data from its year 2011 income statement are as follows: Revenues........$8,000,000 Variable costs........ 4,320,000 Fixed costs...........
-
Mid-Atlantic Healthcare USA operates two medical groups, one in Philadelphia and one in Baltimore. The semi-annual bonus plan for each medical groups president has three components: a. Profitability...
-
Thanatos & Hades (T&H) is a law firm that specializes in writing wills. Its job-costing system has one direct cost pool, professional labour, and a single indirect cost pool that includes all...
-
What is a best practice in general? Give examples of best practices in an area unrelated to project management, such as nutrition, exercise, or child rearing.
-
What are some unique features of project management software in general?
-
Why should organizations identify and use best practices? What are the main categories of best practices developed as part of OPM3?
Study smarter with the SolutionInn App