Q 3 Abdelaziz Compagny produces 3 types of products. During the year the joint c
ID: 2519932 • Letter: Q
Question
Q 3 Abdelaziz Compagny produces 3 types of products.
During the year the joint costs of processing the 3 products were $350,000.
Production and sales value information were as follows:
Sales Value
Product Units produced at Split-Off Separable Costs Selling Price
Product A 400,000 $10 per unit $6.00 per unit $40 per unit
Product B 300,000 $9 per unit $4.00 per unit $28per unit
Product C 500,000 $6 per unit $3.00 per unit $18 per unit
a. Allocate the joint costs using the physical output method.
b. Allocate the joint costs using the net realizable value method.
c. Allocate the joint costs using sales value at split-off point method.
Explanation / Answer
a. Allocation of joint costs by physical output method Products Units produced Joint Costs Product A 400000 116667 Product B 300000 87500 Product C 500000 145833 1200000 350000 b. Allocation of joint costs by net realizale value method. Final selling Separable Net realisable Net realisable Allocated Products Units produced Price Costs Price (B-C) Value (A x D) joint costs (A) (B) (C) (D) (E) Product A 400000 40 6 34 13600000 168198 Product B 300000 28 4 24 7200000 89046 Product C 500000 18 3 15 7500000 92756 1200000 0 28300000 350000 c. Allocation of joint costs by slae value at split-off At split off Products Units produced Sales price Sales Value Joint Costs Product A 400000 10 4000000 144330 Product B 300000 9 2700000 97423 Product C 500000 6 3000000 108247 1200000 9700000 350000
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