CA Intermediate · Cost and Management Accounting · Joint Products and By Products
Sundaram Chemicals produces two joint products, P and Q, from a common process costing ₹3,60,000. Output is 6,000 kg of P and 4,000 kg of Q. Using the physical quantity method, the joint cost apportioned to Q is:
Under the physical quantity method, Q's share is 4,000 of 10,000 kg, which is 40%. Forty percent of the joint cost of ₹3,60,000 gives ₹1,44,000 for Q. The ₹2,16,000 figure is the share of P.
- A₹1,44,000Correct
- B₹2,16,000
- C₹1,80,000
- D₹1,20,000
Explanation
Total output = 6,000 + 4,000 = 10,000 kg. Q's share = 4,000/10,000 = 40%. 40% of ₹3,60,000 = ₹1,44,000. Check: P gets 60% = ₹2,16,000, and 2,16,000 + 1,44,000 = 3,60,000. ₹2,16,000 is P's share, a mix-up of products.
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