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).

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JOINT COST AND BY-PRODUCT COSTS
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
unit
per
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).
Transcribed Image Text:JOINT COST AND BY-PRODUCT COSTS 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 unit per 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).
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