Assignment Questions - JOINT PRODUCT & BY PRODUCT COSTING

Assignment Questions

 

JOINT PRODUCT & BY PRODUCT COSTING

Question 1. A company manufactures P.Q and R from a joint process and allocates joint costs on the basis of relative sales value at split-off. The following data is given

                                                                              P                             Q                             R

Units produced                                 50,000                     40,000                     10,000

Sales value at split off –          Rs 4,20,000                  2,70,000                     60,000

Joint costs – Rs.4,50,000

If 10,000 units of R were processed further and sold for Rs.78,000 what was the gross profit on this sale?

 

 

Question 2. In a concern engaged in process industry, four products emerge from a particular process of operation. The total cost of input for the period ended 30th September 2002 is Rs.2, 53, 500. The details of output, additional cost after 'split off point' and sales value of the products are appended below.

Product	Output – kg	Additional processing cost after split-off point – Rs.	Sales value Rs.
A	8, 000	60, 000	1,68,000
B	5, 000	10, 000	1,10,000
C	3, 000	—	60,000
D	4, 000	20, 000	90,000

If the products are sold at 'split off point' without further processing, the sales value would have been,

A: Rs.1, 15, 000

B: Rs.90, 000

C: Rs.55, 000

D: Rs.80, 000

You are required to prepare a statement of profi tability based on the products being sold:

I] After further processing, and

II] At the split off point.

 

Question 3. JB Ltd. produces four joint products, A, B, C and D, all of which emerge from the processing of one raw material. The following are the relevant data:

Production for the period:

Joint Product	Number of Units	Selling Price per Unit (Rs.)
A	500	18.00
B	900	8.00
C	400	4.00
D	200	11.00

The company budgets for a profi t of 10% on sales value. The other estimated costs are:

¨              Carriage inwards: Rs.1, 000

¨              Direct wages: Rs.3, 000

¨              Manufacturing overheads: Rs.2, 000

¨              Administration overheads: 10% of the sales value

You are required to,

I] Calculate the maximum price that may be paid for the raw material

II] Prepare a comprehensive cost statement for each of the products allocating the materials and other

costs based up on: Number of units and Sales value.

 

 

 

 

ANSWER HINTS
Question No.	Answer
1	Rs.32,000
2	After further processing ; A=Rs. 27, 000, B=Rs. 25, 000, C= Rs. 15, 000, D=Rs.17, 500. At the split off point; A=Rs. 29, 257, B=Rs. 22, 897, C= Rs. 13,993, D=Rs. 20, 353.
3	Ì. 10,000; II. (A) 4500; 8100; 3600; 1800.      (B) 8100; 6480; 1440; 1980.