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John Moffat.
John Moffat.-
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firelion28
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Hi John
Needed your help to clear one concept
While calculating, the total joing production costs, the questions gave the following in process costing for joing products
Opening inventory – $1000
Added material – $10000
Conversion costs – $ 12,000
Closing inventory $3000I added all of them and got the total joint production costs as $26,000 however it is wrong and I dont understand why the book says $23,000 as we are incurring all these costs in the production process
John Moffat
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If you are copying everything correctly, then neither you nor your book are correct!
If you start with inventory of 1,000 and then spend another 10,000 and another 12,000, then the total cost is $23,000. If some of the material is left in closing inventory, then only 20,000 (23,000 – 3,000) was spent on what was actually produced.
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