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- This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.

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- July 21, 2016 at 4:50 pm #328245
1.Is market value basis and sales value basis the same thing?

2. Two product G and H are created from a joint process. G can be sold immediately after split-off. H requires further processing before it is in a saleable condition. There are no opening inventories and no work in progress. The following data are available for the last period;

-Total joint cost $384,000

-Further processing cost( Product H) $159,600Product:

G-selling price $0.84

sales units 400,000

prod units 412000H-selling price $1.82

sales units 200,000

prod units 228,000Using the physical unit method for appointing joint production costs, what was the cost value of the closing inventory of product H for the last period?

The answer is $36,400

-Could you first explain what the question mean?

-The workingsThanks in advance.

July 21, 2016 at 5:59 pm #3282501. Yes – market value and sales value are the same thing

2. I really do not understand why you are asking what the question means (assuming you have watched my lectures)! The joint costs of $384,000 are apportioned on the base of the units of each product. When you have calculated the cost per unit for H, then you can multiply by the number of units in the closing inventory to get the total value of the inventory.

July 21, 2016 at 6:30 pm #328257This question is from the BPP revision kit and I have copied it the same way as it is in the book.

2. A company needs to produce 340 litres of X. There is a normal loss of 10% of the material input into the process. During a given month, the company did produce 340 litres of good production, although there was an abnormal loss of 5% of the material input into the process.

How many litres of material were input into the process during the month?

Answer; 357 litres– How to reach the answer?

July 22, 2016 at 7:32 am #328311BPP do not show the answer as 357 litres at all – they show it as 400 litres (and they show the workings).

The total loss is 15% of input, therefore the output was 85% of the input, and therefore the input is 340/85% = 400 litres

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