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 5 years ago by John Moffat.
- AuthorPosts
- December 4, 2018 at 8:58 am #487134
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= 20660This 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= 3750Profit = 20000 – 6250 = 13750
profit of B = 240000 -3750 = 20250But 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 #487190The 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 #487222Okay. So my answers are correct??
December 4, 2018 at 3:03 pm #487228Yes.
- AuthorPosts
- The topic ‘Joint costing’ is closed to new replies.