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The following question is from the September 2022- August 2023 exam sitting.
Output from a process are two joint products, A and B Joint costs are apportioned between joint products on the basis of units produced. Details for a period are tabulated below:
Units produced A:500 B:400Units sold A: 450 B:350
Selling price per unit A:$10 B:$8
Joint costs were $6,300 for the period
What is the total profit for the period from the sale of the joint products?
A:$1,700
B:$1,000
C:$1900
D:$2600
Please do not simply type up a full question and expect to be provided with a full answer.
You need to apportion the joint costs on the basis of the number of units produced. So 500/900 of the total to A and 400/900 to B.
Having got the total for each product you can divide by the number of units to get a cost per unit for each product.Then you can use the number of units sold to calculate the total profit (the profit per unit for each product being the selling price less the cost per unit already calculated).
Our free lecture on joint products explains exactly how to answer this question. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well 🙂
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