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Joint costing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Joint costing

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 4, 2018 at 8:58 am #487134
    iza1
    Participant
    • Topics: 115
    • Replies: 112
    • ☆☆☆

    Hello sir,

    If sales – 2000 , production – 4000 and sales price is 10/unit – A
    If sales – 2000 , production – 2000 and sales price is 12 /unit – B
    with a joint cost of 10000 what is the total profit on the basis of units produced basis ?

    Cost / unit = 10000/ 6000= 1.67

    Therefore

    Profit of A – 20000 – 6680 = 13320
    Profit of B – 24000 – 3340= 20660

    This if done on the basis of sales value of production

    Cost of A = 40000/64000 X 10000 = 6250
    Cost of B = 24000/64000 X 10000= 3750

    Profit = 20000 – 6250 = 13750
    profit of B = 240000 -3750 = 20250

    But i read somewhere that irrespective of the method total profits should be same which is not the case here. Can you explain why

    December 4, 2018 at 2:36 pm #487190
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54719
    • ☆☆☆☆☆

    The profit will not be the same because there is inventory and the inventory will be valued differently in the two methods.

    December 4, 2018 at 2:54 pm #487222
    iza1
    Participant
    • Topics: 115
    • Replies: 112
    • ☆☆☆

    Okay. So my answers are correct??

    December 4, 2018 at 3:03 pm #487228
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54719
    • ☆☆☆☆☆

    Yes.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Joint costing’ is closed to new replies.

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