Two joint products A and B are produced in a process. Data for the last period are as follows: product A sales 480 tonnes production 600tonnes, product B sales 320 tonnes production 400 tonnes. Common production costs in the period were 12000 there was no opening inventory. Both products had s gross profit margin of 40%.commoncosts were apportioned on physical basis. What was the gross profit for product A in the period?.... I managed to calculate the apportioned production costs for A and got $7200,then got a portion that attributed to the value of sales $5760 then used the profit margin 40%*$5760 and got $2304 bt the answer on the script is saying profit should br calculated as $5760*40/60. Why dividing bt 60 instead of 100 sir!
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Process costing joint products
5y ago#1If the profit is 40% of the sales, then the cost must be 60% of the sales.
So for every $60 cost, the sales are $100 and the profit is $40.
Therefore the profit is $40 for every $60 cost. Therefore in total it is 40/60 of the total cost.
Okay now l get it... Thank you so much Sir!
5y ago#3You are welcome :-)
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