Determine the joint cost, Cost Accounting

Determine the Joint Cost

A company produces three products, Y1, Y2, and Y3 in the similar process.  The data below reflects average monthly results as:

 

Y1

Y2

Y3

Monthly output (kg)

40,000

20,000

20,000

Sales Value at split off (shs.)

0

30,000

105,000

Sales Value after Split off

45,000

100,000

155,000

Costs of further processing

20,000

40,000

65,000

The joint costs were Shs.100,000

Required 

Assign the joint cost employing the three methods employed to assigned joint costs.

Solution

(i)  Physical/Measurement/Unit Method

 

Y1

Y2

Y3

TOTAL

Physical Output: (Kg)

40,000

20,000

20,000

80,000

Proportion

50%

25%

25%

 

Joint costs allocated

50,000

25,000

25,000

 

(ii) Constant Gross Margin Rate Method

2043_Determine the Joint Cost.png

(iii) Net Realizable Value/Method

Net Realizable Value = Ultimate Sales Value - Separable Costs

 

Y1

Y2

Y3

TOTAL

Ultimate Sales Value:

45,000

100,000

155,000

 

Less: Separable Costs

(20,000)

(40,000)

(65,000)

 

Net Realizable Value:

25,000

60,000

90,000

175,000

Proportion on Net Realizable Value

14%

34%

52%

 

Allocation of Joint Costs:

14,000

34,000

52,000

100,000

 

Posted Date: 2/7/2013 4:11:52 AM | Location : United States







Related Discussions:- Determine the joint cost, Assignment Help, Ask Question on Determine the joint cost, Get Answer, Expert's Help, Determine the joint cost Discussions

Write discussion on Determine the joint cost
Your posts are moderated
Related Questions

Discuss the advantages and disadvantages of designing an IC using VHDL and synthesis compared with the traditional design approach using schematic capture, simulation and layout.

GZ Inc. manufactures two products that require both machine processing and labor operations. Although there is unlimited demand for both products, GZ could devote all its capacitie

Ask What is the major value of the weighted cost of capital calculation for the firm? question #Minimum 100 words accepted#

Tracking Overhead Jack would have a many task at hand if he tried to daily trace all such items of overhead. For example: x     How difficult it would  become to track the "

An investment alternative in a project requires a capital cost of $102 millions completed at time zero. The investment will produce a stream of revenue of $50 millions per year ove

Tlie subphylum is called Uniramia because of the presence of unbranched appendages. These animals have non-jointed mandibles, uubranched appendages without any palps. They have

Required Ledgers in Financial System In the financial Systems the Required ledgers are as: The General Ledger Debtors Ledger Creditors Ledger

Outline of an ABC System An ABC costing system operates like given: Step 1 Find out an organization's major activities. Step 2 Find out the factors that identi

Time Keeping - Cost Accumulation A labour cost control routine should ensure that payments are paid only to employees who have spent time at the work place and that payments a