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Two products J and K are being created from a joint process. There was no opening inventory of finished goods. Joint product costs were $630,000.
Product closing inventory(units) sales(units)
J 1,000 11,000
k 4,000 24,000
Using the physical unit basis for apportionment of joint production costs, what was the value of closing inventory of product J?i have worked the ques as follows;
12/28 * $630000= $270000 for product J270000/12000 units = $ 22.5 per unit of J
closing inventory J= 1000* $22.5= $ 22500
[ But the answer is $15750, please help me with where the fault is]
The fault is your fraction of 12/28
They produced 12,000 units of J and 28,000 units of K.
Therefore the total production is 40,000 units.
Therefore the cost for J is 12/40 x 630,000 = 189,000
The rest follows on from there 🙂
Please don’t post the same question in different forums!
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