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Process costing -joint and by-products

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Process costing -joint and by-products

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • September 25, 2017 at 1:52 am #408550
    Anonymous
    Inactive
    • Topics: 2
    • Replies: 0
    • ☆

    I still cannot solve the following joint product question after watching your lecture video. How should I apportion joint cost to the joint products if there are opening and closing WIP in the joint process? Grateful if you can help solve the quetion below as I read many reference book but still cannot find a solution to it.

    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.

    I cannot balance the process 2 account…

    September 25, 2017 at 8:17 am #408570
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54695
    • ☆☆☆☆☆

    You really are wasting your time attempting this question because it could not possibly be asked in Paper F2 – the exam cannot anywhere ask you to write up t-accounts, and process costing and joint products can only be asked in section A of the exam as 2-mark multi-choice questions.

    In addition – even if joint costs were not involved – the examiner has stated that you will not be asked questions on process costing that involve both WIP and losses.

    You should not be attempting questions for which you do not have answers – again it is wasting your time. You must buy a Revision Kit from one of the ACCA approved publishers – they contain lots of exam-standard questions together with answer and workings. If you have any problems with the answers then say what the problem is and I will explain.

    For all of the above reasons it would be wasting both your time and my time for me to produce a full answer.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Process costing -joint and by-products’ is closed to new replies.

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