An international designer produces three (3) jewellery designer items using a joint process. Total joint costs amount to R650 000. The three products are A, B and C. the output details are as follows: Product A 120 units Product B 108 units Product C 112 units Each product can be sold at the split-off point. The sales values at the split-off point are as follows: Product A R2 500 per unit Product B R2 000 per unit Product C R2 225 per unit Alternatively, further processing or each individual product can be undertaken to produce an enhanced product thus: Further processing Sales value after further costs processing Enhanced product A R400 per unit R2 850 per unit Enhanced product B R380 per unit R2 500 per unit Enhanced product C R350 per unit R2 750 per unit Required: Prepare a statement of profit or loss for the company if all three products are processed further and then sold. Assume that there is no opening or closing inventory. It is the company's policy to allocate joint costs to the products using the market value at the split-off point. (Note: round off all amounts to the nearest R1).
An international designer produces three (3) jewellery designer items using a joint process. Total joint costs amount to R650 000. The three products are A, B and C. the output details are as follows: Product A 120 units Product B 108 units Product C 112 units Each product can be sold at the split-off point. The sales values at the split-off point are as follows: Product A R2 500 per unit Product B R2 000 per unit Product C R2 225 per unit Alternatively, further processing or each individual product can be undertaken to produce an enhanced product thus: Further processing Sales value after further costs processing Enhanced product A R400 per unit R2 850 per unit Enhanced product B R380 per unit R2 500 per unit Enhanced product C R350 per unit R2 750 per unit Required: Prepare a statement of profit or loss for the company if all three products are processed further and then sold. Assume that there is no opening or closing inventory. It is the company's policy to allocate joint costs to the products using the market value at the split-off point. (Note: round off all amounts to the nearest R1).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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