Reference no: EM132567225

A company simultaneously produces three products (X, Y and Z) from a single process. X and Y are processed further before they can be sold; Z is a by-product that is sold immediately for $6 per unit without incurring any further costs. The sales prices of X and Y after further processing are $50 per unit and $60 per unit respectively.

Data for October are as follows:

Joint production costs that produced 2500 units of X, 3500 units of Y and 3000 units of Z $140,000

Further processing costs for 2500 units of X $24,000

Further processing costs for 3500 units of Y $46,000

Required:

Question (a) Joint costs are apportioned using the final sales value method. Calculate the total cost of the production of X for October.

Question (b) Define joint costs, split-off point and further processing costs.