I got this question from specimen exam Juune 2014.
I have watched all your lectures on joint costs, but i cant solve this one.
Two products G and H are created from a joint process. G can be sold immediately after split-off. H requires further processing into product HH before it is in a saleable condition. There are no opening inventories and no work in
progress of products G, H or HH. The following data are available for last period:
$
Total joint production costs 350,000
Further processing costs of product H 66,000
Product Production Closing
units inventory
G 420,000 20,000
HH 330,000 30,000
Using the physical unit method for apportioning joint production costs, what was the cost value of the closing
inventory of product HH for last period?
A $16,640
B $18,625
C $20,000
D $21,600
Ask the Tutor ACCA MA
Process Costing
9y ago#1The total production of G is 420,000 - 20,000 = 400,000. The total production of H is the same as that of HH = 330,000 - 30,000 = 300,000
Therefore the total production in the joint process is 700,000, and the cost per unit is 350,000 / 700,000 = $0.50 per unit.
H is then turned into HH at an extra cost of 66,000 / 300,000 = $0.22 per unit.
Therefore the total cost of HH is $0.72 per unit and you value the closing inventory on that amount.
thank you
Hi Mr. John
I need some help solving this question from the Revision kit. I have watched the lectures yet i cannot seem to solve it. Please help me understand how to arrive at the answer.
12.6)
Two products 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 last period:
$
Total joint production costs 384,000
Further processing costs (product H) 159,600
Product Selling price Sales Production
per unit Units Units
G $0.84 400,000 412,000
H $1.82 200,000 228,000
Using the physical unit method for apportioning joint production costs, what was the cost value of the
closing inventory of product H for last period?
A $36,400
B $37,520
C $40,264
D $45,181
4y ago#4The cost per unit when they leave the joint process is $384,000/(412,000 + 228,000) = $0.60 per unit.
The cost of the further processing of H is 159,600/228,000 = $0.70 per unit.
Therefore the cost per finished unit of H is $1.30 per units, and there are 228,000 - 200,000 = 28,000 units of closing inventory.
Thank you so much Mr. John
4y ago#6You are welcome.
This topic is locked — no new replies.