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Philip Company manufactures 4 products in a process plant. Three of these are by- products requiring additional processing after separation from the main product. In the past, the by-product have been charged only with costs incurred after separation. Because of the increasing significance in sales income of the by-products, the management has decided that it would be a fairer presentation of the facts if some of the production costs before separation were allocated to the by-product before preparing the income statement by products. the total costs after separation were as follows: BZ, main product 40,000.00 Z-1, by-product 1,800.00 Z-2, by-product 2,500.00 Z-3. by-product 11,000.00 Production for the month with estimated sales prices were as follows: 200,000 kgs. BZ, saleable @ P1.50 20,000 kgs. Z-1, saleable @ P0.80 18,000 kgs. Z-2, saleable @ P0.50 50,000 kgs. Z-3, saleable @ P0.90 Management estimates a reasonable average net profit of 15% for product Z-1, 20% for Z-2 and 10% for 2-3. Sellig and general expenses was calculated to be 30% of the total sales for the main product and the by-products. (Required on the left) REQUIREMENTS: 1 A schedule of production costs showing allocation before separation using the reversal cost method. 2 A comparative income statement for all four products, assuming the following quantities were actually sold and delivered: BZ, main product 150,000 kg. Z-1, by-product 10,000 kg Z-2, by-product 18,000 kg Z-3. by-product 20,000 kg

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