Closing inventory values of Joint product ~need helps

CChelsea6y ago

I am doing the practices test of finding the cost of the value of the closing inventory of product X Total Joint costs $ 384,000 Further processing cost (product H) $ 159,600 Using the Joint cost apportioned to H = 228,000 sales / 640,000 total sales x cost $384000 = $136,800 Total Product cost ($136,800 + 159,600) = $296,400 ** Closing inventory values of H = 28,000 / 228,000 X 296,400 = $36,400 My Question is where can i get this **28,000** from Really appreaciated if can get further helps

SShifa6y ago#1

I think I've solved a similar?— if not the same ?— question from BPP revision kit. As far as I can recall, 28000 is the difference between the production & sales units. Since you're asked to find out the value of closing inventory, it is imperative that you calculate this difference before apportioning the ADJUSTED production costs.

EEsar5y ago#2

Sales value of production W (12,000 units × $10) $120,000 X (10,000 units × $12) $120,000 Joint production costs will be apportioned equally between the two products as the sales value of production is the same for each product. Joint production costs allocated to X = $776,160/2 = $388,080 Value of closing inventory = 2,000/10,000 × $388,080 = $77,616