1. What is the operating profit earned by the three products for one quarter?2. Should the division process Product Alpha further or sell it at split-off?What is the effect of the decision on quarterly operating profit?equipment costing P15,400 per quarter. Additional materials and labor alsoThe revenues from each product are as follows: Alpha, P100,000; Beta,process Alpha further means that the company must rent some specialManagement is considering processing Alpha beyond the split-off point,which would increase the sales values of Alpha to P120,000. However, toProblem 17 (Sell or Process Further; Basic Analysis)SHE, Inc., produces three products (Alpha, Beta, and Gamma) from acommon input. The joint costs for a typical quarter follow:Direct materialsDirect laborOverheadP500,00036,00072,000The revenues from each product are as follows: Alpha, P100,000; Bete.P93,000; and Gamma, P30,000.Management is considering processing Alpha beyond the split-off pooequipment costing P15,400 per quarter. Additional materials and laborneeded would cost P8,500 per quarter.Required:1.2. Should the division process Product Alpha further or sell it atWhat is the effect of the decision on quarterly operating profit?

solution requirement 1 calculation of operating profit earned by three products for one quarter…

her; Basic Analysis) SHE, Inc., produces three products (Alpha, Beta, and Gamma) common input. The joint costs for a typical quarter follow: Direct materials Direct labor Overhead P500,000 36,000 72,000 The revenues from each product are as follows: Alpha, P100,0 P93,000; and Gamma, P30,000. Management is considering processing Alpha beyond the split-c which would increase the sales vol

her; Basic Analysis) SHE, Inc., produces three products (Alpha, Beta, and Gamma) common input. The joint costs for a typical quarter follow: Direct materials Direct labor Overhead P500,000 36,000 72,000 The revenues from each product are as follows: Alpha, P100,0 P93,000; and Gamma, P30,000. Management is considering processing Alpha beyond the split-c which would increase the sales vol

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $14. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost plus assuming 22% transfer price? • Variable cost per unit $6.71 • Fixed cost per unit 1.03 • Division B sales price of Component X 14.50
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· equipment costing P15,400 per quarter. Additional materials and. labor also process Alpha further means that the company must rent some special Problem 17, page 323C- SHE Inc. (Sell or Process Further) Requirement: What is the effect of the process-further decision on the quarterly operating profit? Problem 17 (Sell or Process Further; Basic Analysis) SHE, Inc., produces three products (Alpha, Beta, and Gamma) from a common input. The joint costs for a typical quarter follow: Direct materials Direct labor Overhead P500,000 36,000 72,000 The revenues from each product are as follows: Alpha, P100,000; Betn, P93,000; and Gamma, P30,000. Management is considering processing Alpha beyond the split-off point, Which would increase the sales values of Alpha to P120,000: However, to needed would cost P8,500 per quarter. SOLUTION & ANSWER:
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