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A company manufactures two joint products and one by-product in a single process. Data for
November are as follows.
$
Raw material input 316,000
Conversion costs 95,000
There were no inventories at the beginning or end of the period.
Output Sales price
Units $ per unit
Joint product E 21,000 25
Joint product Q 18,000 15
By-product X 2,000 3
By-product sales revenue is credited to the process account. Joint costs are apportioned on a sales
value basis. What were the full production costs of product Q in November (to the nearest $)?
A. $137.547
B. $267.453
C. $256.875
D. $154.125Please do not simply type out full questions and expect to be provided with a full answer. You must have an answer in the same book in which you found the question, so in future please ask about whatever it is in the answer that you are not clear about and then I will explain.
The total joint cost is 316,000 + 95,000 – 6,000 = $405,000.
This is apportioned between E & Q is the ratio of the sales values of the production, which are 525,000 for E and 270,000 for Q.
Therefore the production cost of Q is (270,000/(270,000 + 525,000) ) x 405,000 = $137,547
Have you watched my free lectures on this? 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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