Constant gross margin rate, Cost Accounting

Constant Gross Margin Rate

This method assumes that every product contributes an equal percentage of gross profit for every shilling of sales. It works back from gross margin to the joint costs allocation. It includes the given steps:

(i) Compute the overall rate of gross margin for every the products

(ii) Multiply the computed overall rate with the sales of every product to receive the gross margin of the product.

(iii) Deduct the gross margin from the sales value of the product to find out the net costs for each product.

(iv) Deduct separable costs from the net costs to receive joint costs allocated.

Posted Date: 2/7/2013 3:01:54 AM | Location : United States







Related Discussions:- Constant gross margin rate, Assignment Help, Ask Question on Constant gross margin rate, Get Answer, Expert's Help, Constant gross margin rate Discussions

Write discussion on Constant gross margin rate
Your posts are moderated
Related Questions


Are non-profit and governments required to depreciate assets? Why or why not? Would it make sense for them to use double declining balance? Is there a difference between a non-p

how can a poorly controlled budget cause problesm for a business?

Elements of Cost Nearly there are three elements of cost - labor, material, and expenses. These are additional divided into indirect and direct material, indirect and direct la

What are the key reasons for product cost differences among traditional costing system and ABC systems? Explain four decisions for which ABC information is useful?

Corporation has determined the contribution margin ratio is 35% and the income tax rate is 40%. Required: A) Assume break-even volume in dollars is $1,500,000. What are total fixed

Variable Overhead Expenditure Variance Budget for December 2003; Shs. Fixed Overheads 11,480 Variable Ov

diff between cost estimation and cost accounting

1. A country has the per-worker production function  y t = 6 k t 0.5   where y t is output per worker and k t is the capital-labor ratio. The depreciation rate is 0.1 and t