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Exercises On Joint Cost and By-Products
Exercises On Joint Cost and By-Products
1)
Products Value at Split-off Joint Costs Allocated (JCA)
A 80,000 64,000
B 60,000 48,000
C 40,000 32,000
D 20,000 16,000
Total 200,000 160,000
Formula to get JCA: Product VSO divided by Total VSO of all products times Total Joint Cost (TJC)
Assumed TJC: 160,000
2)
Products Final Sales Value (FSV) Additional Processing Cost (APC)
A (1,600 x 200) 320,000 100,000
B (800 x 400) 320,000 140,000
Formula to get JCA: Product SVSO divided by Total SVSO times Joint Production Costs (JPC)
JPC: 120,000
To get the FSV: [Product] Units after split-off times [Product] Unit Selling Price
To get the SVSO: FSV - APC
3)
Products Final Sales Value (FSV) Further Process Costs (FPCs)
A (2,000 x 30) 60,000 24,000
B (1,000 x 60) 60,000 36,000
Formula to get JCA: Product SVSO divided by Total SVSO times JPC (Materials + Direct Labor + Factory Overhead)
Total JPC: 55,000
To get the FSV: [Product] Units after split-off times [Product] Unit Selling Price
To get the SVSO: FSV - FPCs
4)
Products Sales Value (SV) Additional Processing Cost (APC)
DD 9,000 3,000
EE 6,000 3,000
15,000 6,000
Formula to get JCA: Product SVSO divided by Total SVSO times Joint Costs Prior to Split-Off
To get SVSO: SV - APC
5)
Cost of 2,200 shoes (2,200 x 55) 121,000
Scrap value of bad shoes -6,000
Net cost of Job 501 115,000
Cost per good shoes (115,000 / 2,000) = 57.50 (does not include the P1 spoiled work in FO)
Spoilage loss is charged to all production: 56.00 (DMs of P20, DL of P18, and FO of 18 including P1 for spoiled work)
mes Total Joint Cost (TJC)