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
Example B & B Mechanical Repairs is a small, family owned partnership that specialises in the servicing and repair of motor vehicles. The business employs three qualified mecha

The CFO of ABC Municipality has heard of activity based costing and wants to execute it in the municipality. Because ABC involves a number of changes to how service costs are deter

The employees at Warren Manufacturing Company are unionized. As minimum requirements, the union members insist on keeping a work force of at least 300 workers, and accepting an hou

Requirement for additional Funds A business would require additional capital for two purposes: 1. Financing additional fixed assets, and

what is the meaning of classification of cost in relation to variability?

A product is manufactured by passing through three processes: A, B and C. In process C a by-product is also produced which is then transferred to process D where it is completed. F

Operating Income 1. Operating Income is derived from two sources, Rental Income from businesses operating in the warehouse complex and Interest Income of the project operating

Tony Allan Inc is a small manufacturer of metal products in Toronto.  The company rents its factory building.  It uses a job order costing system because it has a wide variety of p

CMM is an internationally recognized standard for calculating the maturity of an organization's software development processes and has become the primary benchmark multinational co

Where the liabilities are identified but the amounts cannot be precisely found, we estimate the liability and give for it as a liability. A common illustration is income tax payabl