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Process costing joint products

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

  • This topic has 3 replies, 2 voices, and was last updated 1 week ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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    Posts
  • January 12, 2021 at 3:16 pm #605624
    Tsits
    • Topics: 3
    • Replies: 3
    • ☆

    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!

    January 13, 2021 at 8:59 am #605686
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 41610
    • ☆☆☆☆☆

    If 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.

    January 13, 2021 at 12:41 pm #605705
    Tsits
    • Topics: 3
    • Replies: 3
    • ☆

    Okay now l get it… Thank you so much Sir!

    January 13, 2021 at 1:54 pm #605708
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 41610
    • ☆☆☆☆☆

    You are welcome 🙂

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