CA Intermediate · Cost and Management Accounting · Joint Products and By Products
Sundaram Chemicals produces products A and B jointly at a joint cost of Rs 2,40,000. Output is A 6,000 kg and B 4,000 kg. Selling prices at split-off are A Rs 30 per kg and B Rs 45 per kg. Using the sales value at split-off method, the joint cost apportioned to B is:
The joint cost apportioned to B is Rs 1,20,000. Sales values at split-off are Rs 1,80,000 each for A and B, so each bears half of the Rs 2,40,000 joint cost. Apportioning on physical units would wrongly give Rs 96,000.
- ARs 96,000
- BRs 1,20,000Correct
- CRs 1,00,000
- DRs 1,44,000
Explanation
Sales value of A = 6,000 x 30 = 1,80,000; B = 4,000 x 45 = 1,80,000. Total = 3,60,000, so B's share is 50%. Joint cost to B = 2,40,000 x 50% = 1,20,000. Rs 96,000 results from apportioning on physical units (4/10).
Did you get it right without looking?
One question tells you little. A timed set on Joint Products and By Products shows your real accuracy, how long you take and where you lose marks.
More Joint Products and By Products questions
- Kaveri Foods processes a raw material into joint products A and B and a by-product C. Joint processing cost is Rs 3,30,000. Sale of C brings…
- In cost accounting, the point in a joint production process at which the individual products first become separately identifiable is called …
- A by-product of a dairy firm is sold for ₹45,000. Its selling and distribution expenses are ₹5,000. The firm follows the practice of treatin…
- In a joint-product process, costs incurred on a product after the split-off point, for example to refine or finish it, are known as:
- Kaveri Foods processes a joint process costing ₹5,00,000 and yields 10,000 kg of main product M and a by-product B of 1,000 kg. By-product B…
- Rohan Chemicals produces joint products M and N. Joint cost is ₹3,60,000. Output is M 2,000 units and N 1,000 units. Final selling price is …