ACCA Applied Knowledge · Management Accounting · Cost accounting methods
A process yields joint products P and Q plus a by-product Z. Joint costs are $52,000. Z output of 1,000 units sells for $3 each with no further costs, and the company credits by-product sales income to the process account. P and Q are apportioned the remaining cost by physical output of 8,000 kg of P and 4,000 kg of Q. What is the joint cost apportioned to Q?
Q is apportioned $16,333. By-product income of $3,000 is deducted from the $52,000 joint costs, leaving $49,000, and Q's one third share of physical output (4,000 of 12,000 kg) gives about $16,333.
- A$17,333
- B$16,333Correct
- C$24,500
- D$13,000
Explanation
Net joint cost = 52,000 - (1,000 x 3) = $49,000. Q share = 4,000/12,000 = one third, giving $16,333. Ignoring the by-product income gives $17,333, which is wrong.
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