Process costing joint and by-product

AApril11y ago

Hello I will like you to help me out with the answer for this question on Joint and By-product please I am having some complications. Thank you. PR Ltd manufactures two joint products,P&R in a common process. Data for June are as follows. Opening Inventory $1000 Direct Materials $ 10,000 Conversion Cost $12,000 Closing Inventory $3,000 P Production Units – 4000 Sales Units – 5000 Sales Price $ per unit – $5 R Production units – 6000 Sales units – 5000 Sales price $ per unit – $10 If cost are apportioned between joint products on a sales value basis, what was the cost per unit of product R in June?

John MoffatTutor11y ago#1

The cost incurred in the joint prices is 1,000+10,000+12,000-3,000 = 20,000 This is spilt between the 2 products on the basis of the sales value of the production. For P this is 4000 x $5 = 20,000; and for R it is 6,000 x $10 = 60,000 So 60,000/80,000 of the joint cost is given to R (and for the cost per unit, you obviously divide by 60,000) The free lecture on joint costs may help you.

AApril11y ago#2

Thank you.

John MoffatTutor11y ago#3

You are welcome :-)

IIzabela10y ago#4

When I watch the lectures I always check afterwards comments because people ask questions in regards to some tasks/tests they come across. On one hand it is a shame they have to ask that again on tutor forum after all because it is extremely difficult to find that question later on... Luckily I found it. Thank you for solution for that task :) I really enjoy the way you explain things. PS when you said: So 60,000/80,000 of the joint cost is given to R (and for the cost per unit, you obviously divide by 60,000) YOU meant divide by 6000? The amount of produced units???

John MoffatTutor10y ago#5

If questions are asked about the specific example in the lecture, then I try and answer them there. However, many many people ask about other questions, and asking about other questions as a comment on a lecture is confusing for everyone (and must be asked in this forum). Also, it is simply not possible for me to check every single lecture every day to see if there are any questions - I spend enough of my day answering the Ask the Tutor questions, and I do have work to do :-) (It is not exactly hard to find this forum because there is a tab at the top of all the pages that is labelled "Ask ACCA Tutor" :-) ) Yes I did mean that - I accidentally put too many 0's :-)

IIzabela10y ago#6

I do imagine how many questions you have to reply to, so thank you for answering my question as well :) I know how to ask you a question on "ask ACCA tutor" it is just difficult to find that person who asked you a ques. underneath the lecture if she/he did the same on the "ask the tutor" part and got the answer from you :) if I cannot find it in the future I hope you do not mind me asking about the same task in separate question :) Regards, Izabela

John MoffatTutor10y ago#7

But the search box on the top right hand side of every page does actually work very well :-)