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Process costing -joint and by-products

Forums › Ask CIMA Tutor Forums › Ask CIMA P1 Tutor Forums › Process costing -joint and by-products

  • This topic has 5 replies, 4 voices, and was last updated 6 years ago by Cath.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • September 24, 2017 at 2:18 pm #408501
    Anonymous
    Inactive
    • Topics: 2
    • Replies: 0
    • ☆

    XYZ plc, a paint manufacturer, operates a process costing system. The following details related to process 2 for the month of October:

    Opening work in progress
    5000 litres fully complete as to transfers from process 1 and 40% complete as to labour and overhead, valued at £60000

    Transfer from process 1
    65000 litres valued at cost of £578500

    Direct labour
    £101400

    Variable overhead
    £80000

    Fixed overhead
    £40000

    Normal loss
    5% of volume transferred from process 1,scrap value £2.00 per litre

    Actual output
    30000 litres of paint X (a joint product)
    25000 litres of paint Y (a joint product)
    7000 litres of by-product Z

    Closing work in progress
    6000 litres fully complete as to transfers from process 1 and 60% complete as to labour and overhead.

    The final selling price of products X, Y and Z are:
    Paint X £15.00 per litre
    Paint Y £18.00 per litre
    Product Z £4.00 per litre

    There are no further processing costs associated with either paint X or the by-product, but paint Y requires further processing at a cost of £1.50 per litre.

    All three products incur packaging costs of £0.50 per litre before they can be sold.

    Required:(a)Prepare the process 2 account for the month of October, apportioning the common costs between the joint products, based upon their values at the point of separation.

    (b)Prepare the abnormal loss/gain account, showing clearly the amount to be transferred to the profit and loss account.

    I spared no pains to do this question but I still couldn‘t solve it. Can you tell me how to solve Part a & b ? Many thanks!

    September 25, 2017 at 9:57 am #408579
    Cath
    Participant
    • Topics: 0
    • Replies: 446
    • ☆☆☆

    Hi – you’ll be pleased to know that process costing isn’t on the CIMA P1 syllabus so not sure where you’ve had this question from but there is no need to worry about it 🙂

    Many Thanks
    Cath

    May 9, 2018 at 7:22 pm #450932
    olawaleoke
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    please i need your assistant on this question
    JK has budgeted sales for next year of 24,000 units and inventory levels are expected
    to remain constant throughout the year. Each unit produced will require 3 labour hours
    and the budgeted labour rate will be $15 per hour. It is estimated that 10% of units
    produced will be wasted.
    It is expected that 15% of the total hours worked will be paid at overtime rates. 10% of
    the total hours will be paid at the basic rate plus an overtime premium of 50% of the
    basic rate. 5% of the total hours will be paid at the basic rate plus an overtime premium
    of 100% of the basic rate.
    The labour cost budget for next year is:

    May 10, 2018 at 9:51 pm #451149
    Cath
    Participant
    • Topics: 0
    • Replies: 446
    • ☆☆☆

    Hi there.
    When students have a query on this forum – sometimes its regarding a question – other times regarding a theory or something in the notes or videos.
    Generally, when querying a question then the student gives me the answer and workings and from there they explain specifically what part of the answer or workings they dont follow.
    If I work this out and give you an outright answer in $ – how does that help your learning process.?
    Please tell me the model answer and let me know which part you cant calculate.
    Many Thanks

    May 20, 2018 at 11:38 am #452966
    tamkas
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    Hi,
    Have you got the answer olawaleoke? My email reads as alfkas@hotmail.com, if you be so kind to forward

    Thxs

    May 20, 2018 at 4:44 pm #453005
    Cath
    Participant
    • Topics: 0
    • Replies: 446
    • ☆☆☆

    Im afraid I said no to answering Olawaleoke – this is not a CIMA question and if all you need is the answer (not an explanation) then surely this is provided in your text book?

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Process costing -joint and by-products’ is closed to new replies.

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