Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Process costing -joint and by-products
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- September 25, 2017 at 1:52 am #408550AnonymousInactive
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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 £60000Transfer from process 1
65000 litres valued at cost of £578500Direct labour
£101400Variable overhead
£80000Fixed overhead
£40000Normal loss
5% of volume transferred from process 1,scrap value £2.00 per litreActual output
30000 litres of paint X (a joint product)
25000 litres of paint Y (a joint product)
7000 litres of by-product ZClosing 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 litreThere 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 #408570You 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.
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