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MA Chapter 13 Questions Process Costing – Joint Products

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  1. in Q.1 by product is a product that produced at same time as other products which have relatively low volume compared to other products .
    this option 1 and also it is option 4 an are same statement why which of them correct and the other is wrong even BPP book respond this question like this (Statement (i)is in correct because the value of the product relatively high even the output volume is relatively low .This product would hen be classified as a joint product ) so sir clarify me this question thanks .

  4. Quesion number 4, as similar excercise that Professor has given, but I still wonder why in that period we just have sales for product A and B are less than what we produce, but when we put them into joint production cost (where we calculate the total value of production) we did count all 20,000 products, but not only 15,000 for A or 18,000 for B? Thank you.

    • The joint cost has to be split based on the sales value of the production even though not all the production is sold in this period. The reason is that the rest of the production would be in inventory and would be sold in the following period.

  9. All the while I’ve been thinking that joint costs are apportioned based on production units. It’s surprising that this time it was based on sales units. I was wondering why are the joint costs apportioned based on sales units?

    • But I explain the reason in my free lectures!!! Did you not watch the lectures before attempting these questions?

      Suppose we produced 10,000 units of each of 2 products, X and Y. Suppose all 10,000 of X were sold this year, but none of the 10,000 of Y were sold this year but instead remain in inventory and are sold next year.

      It would be ridiculous then for all of the costs to be charged just to X. That would mean that the 10,000 of Y ended up with a cost of zero, which would be nonsense 🙂

      • I’ve watched the lecture before referring the book because of which I was able to understand the concept and thereby solve many questions but maybe I’m missing something.

        I was saying the same thing that costs must be apportioned to the units produced and maybe not the sales.

        For question 4, shouldn’t it be like

        $350K*(15000/33000) = $159,090.90

        And then $159,090.90/15000 = $10.61 per unit for product P

      • No. Question 4 says to apportion on a market value basis, not on a units basis, and so we use the sales value of what was produced (as per the answer that appears when you ‘review quiz’ after submitting it).

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