1

Final additional Allocated

Product units Selling price Total MV Processing NRV Joint Cost
Bex 1,600 50.00 80,000.00 25,000 55,000.00 16,500
Rom 800 100.00 80,000.00 35,000 45,000.00 13,500
Total 100,000.00 30,000
2
Final MV - Product K 7,000.00 Joint Cost 54,000
Less: Further Processing 3,000.00 Less: NRV- product K 4,000
Net Realizable value 4,000.00 Net joint cost 50,000
Allocated
Products Final MV Joint Cost
K 40,000 26,666.67
W 35,000 23,333.33
Total 75,000 50,000.00

3
Final Further Allocated Additional Total
Products Sales Value Processing NRV Joint Cost Processing Production Cost
Rosal 150,000 50,000.00 100,000.00 62,500 50,000.00 112,500
Camia 275,000 75,000.00 200,000.00 125,000 75,000.00 200,000
Santan 225,000 125,000.00 100,000.00 62,500 125,000.00 187,500
total 400,000.00 250,000 250,000.00 500,000

4
Joint cost 250000
Divide by total production 10000
Average unit cost 25
Average Allocated Additional total
Product Units unit cost Joint cost Processing Production Cost
Rosal 3,000 25.00 75,000.00 50,000 125,000.00
Camia 4,000 25.00 100,000.00 75,000 175,000.00
Santan 3,000 25.00 75,000.00 125,000 200,000.00
Total 10,000 250,000.00 250,000 500,000.00
Problem I
Net Realizable Value Method
Cost after allocated Cost after total
Products units selling price Total split-off NRV Joint cost split off Production
A 1,500 10.00 15,000.00 3,000 12,000.00 8,400 3,000 11,400
B 2,500 12.00 30,000.00 - 30,000.00 21,000 - 21,000
C 1,000 15.00 15,000.00 7,000 8,000.00 5,600 7,000 12,600
Total 50,000.00 35,000 10,000 45,000

Products Units Sold Unit cost COGS Units Produced Ending Inv. Cost of EI
A 1,200 7.60 9,120 1,500.00 300 2,280
B 2,200 8.40 18,480 2,500.00 300 2,520
C 600 12.60 7,560 1,000.00 400 5,040

Physical Units Method

Allocated Cost afer Total Cost Units Produced Cost per Units Sold COGS
Products units Joint Cost Split-off Production Unit
A 1,500 10,500.00 3,000.00 13,500 1,500.00 9.00 1,200 10,800
B 2,500 17,500.00 - 17,500 2,500.00 7.00 2,200 15,400
C 1,000 7,000.00 7,000.00 14,000 1,000.00 14.00 600 8,400
Total 5,000 35,000.00 10,000.00 45,000

Problem IIOwen Company

Market Value Method

Units MV at total Allocated
Products Produced Split-off MV Joint Cost
A 20,000 4.00 80,000.00 56,000
B 32,000 1.75 56,000.00 39,200
C 36,000 3.00 108,000.00 75,600
D 24,000 2.75 66,000.00 46,200
Total 112,000 310,000.00 217,000
Average Unit Cost Method
Total Joint cost 217,000 Allocated
Divide by total units produced 112000 Product Weight Joint Cost
Average Unit Cost Method 1.94 A 300,000 60,000
B 100,000 20,000
Units Average Allocated C 100,000 20,000
Products Produced Unit Cost Joint Cost Total 500,000 100,000
A 20,000 1.94 38,750
B 32,000 1.94 62,000 9
C 36,000 1.94 69,750 Allocated
D 24,000 1.94 46,500 Products Units Joint Cost
Total 112,000 217,000 L 60,000 65,000
M 60,000 65,000
Total 120,000 130,000
4
Additional Allocated Total Sales Value
Product Sales Processing NRV Joint Cost Less: Total Producion cost
A 245,000 200,000.00 45,000.00 30,000 Expected Net Income
B 30,000 - 30,000.00 20,000
C 175,000 100,000.00 75,000.00 50,000
Total 150,000.00 100,000

Net Realizable Value - by product (100,000-30,000) = P70,000

Allocated
Product NRV Joint Cost
A 45,000 26,250.00
B 75,000 43,750.00
Total 120,000 70,000.00
Units Cost Per
Produced Unit
1,500 7.6
2,500 8.4
1,000 12.6

Cost of
End. Inv.
2,700.00
2,100.00
5,600.00
Additional Total
Processing Production
50,000 115,000
75,000 140,000
125,000 255,000

500,000
255,000
245,000