Coco Co. owns a large processing line which segregates coconuts into its components upon contact with the breaker of the machine. Presently, it sell the coconut meat, juice, shell and husk to various manufacturers. A feasibility study is being made to process its components into "buko pies" for the meat, "buko juice" for the juice, flower pots for the shells, and fuel briquettes for the husk. At the segregation point, you gathered the following data per unit: 48. Juice P2.00 Meat Shell Husk Selling price Allocated joint cost Profit (loss) P4.00 P1.00 P1.00 0.13 0.06 0.03 0.03 P3.87 P1.94 PO.97 PO.97 The study shows that after further application of additional manufacturing process, the following is projected: Selling price Pi2.00 Add'l proc. Cost P2.00 2.90 P4.00 P2.00 3.80 1.95 1.95 Fixed cost of the plant amounts to P500,000. Interests rate is 12% Which product should go through the additional manufacturing process? a. Coconut meat only because it will give incremental profit of P4.20 per coconut b. All products because all will give additional profits c. Coconut meat only because it will give total profits of P12.08 per coconut. d. None because all will incur losses

Coco Co. owns a large processing line which segregates coconuts into its components upon contact with the breaker of the machine. Presently, it sell the coconut meat, juice, shell and husk to various manufacturers. A feasibility study is being made to process its components into "buko pies" for the meat, "buko juice" for the juice, flower pots for the shells, and fuel briquettes for the husk. At the segregation point, you gathered the following data per unit: 48. Juice P2.00 Meat Shell Husk Selling price Allocated joint cost Profit (loss) P4.00 P1.00 P1.00 0.13 0.06 0.03 0.03 P3.87 P1.94 PO.97 PO.97 The study shows that after further application of additional manufacturing process, the following is projected: Selling price Pi2.00 Add'l proc. Cost P2.00 2.90 P4.00 P2.00 3.80 1.95 1.95 Fixed cost of the plant amounts to P500,000. Interests rate is 12% Which product should go through the additional manufacturing process? a. Coconut meat only because it will give incremental profit of P4.20 per coconut b. All products because all will give additional profits c. Coconut meat only because it will give total profits of P12.08 per coconut. d. None because all will incur losses

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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