Question

1. Tonton Company manufactures two products, Alpha and Omega, from a joint process. One production run costs P539,200 resulting to 1,000 units of Alpha and 4,000 units of Omega. Neither product is saleable at split off but must be further processed such that the separable cost for Alpha is P213.30 per unit and for Omega is P80 per unit. The final market value for Alpha is P510 and for Omega is P360. The joint cost allocated to Alpha using constant margin method is:

2. Tonton Company manufactures two products, Alpha and Omega, from a joint process. One production run costs P539,200 resulting to 1,000 units of Alpha and 4,000 units of Omega. Neither product is saleable at split off but must be further processed such that the separable cost for Alpha is P213.30 per unit and for Omega is P80 per unit. The final market value for Alpha is P510 and for Omega is P360.

The joint cost allocated to Omega using constant margin method is?

Answer 1

	Alpha	Beta	Total
Sales revenue	510000	1440000	1950000
Less: cost of goods sold
Joint cost			539200
Process cost	213300	320000	533300
Gross profit			877500

Gross profit margin = gross profit / sales revenue

=877500/1950000

= 45% or 0.45

	Alpha	Beta	Total
Sales revenue	510,000	1440,000	1940,000
Less : gross profit	229500	648,000	877,500
TOTAL COST	280,500	792,000	107,2500
Less: seperable coet	213,300	320,000	533,300
Joint cost	67200	472,000	539200