1. Allocate the joint costs using the physical units method. 2. Suppose that the products are weighted as follows: Andol 3.0 Incol 2.0 Ordol 0.4 Exsol 1.0 Allocate the joint costs using the weighted average method
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
PHYSICAL UNITS METHOD
Alomar Company manufactures four products from a joint production process: andol,
incol, ordol, and exsol. The joint costs for one batch are as follows:
Direct materials $56,300
Direct labor 28,000
At the split-off point, a batch yields 1,000 andol, 1,500 incol, 2,500 ordol, and
3,000 exsol. All products are sold at the split-off point: andol sells for $20 per unit; incol sells for $75 per unit; ordol sells for $64 per unit, and exsol sells for $22.50 per unit.
1. Allocate the joint costs using the physical units method.
2. Suppose that the products are weighted as follows:
Andol 3.0
Incol 2.0
Ordol 0.4
Exsol 1.0
Allocate the joint costs using the weighted average method
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