Ardmore Company produces two main products jointly, A and B, and C, which is a by-product of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B. Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. Data for April were as follows: Costs before separation P200,000 Costs after separation: A 50,000 B 32,000 C 4,000 Production for April, in pounds: A 800,000 B 200,000 C 20,000 Sales for April: A 640,000 pounds @ P0.4375 B 180,000 pounds @ 0.65 C 20,000 pounds @ 0.30 Determine the gross profit for April.
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.
Ardmore Company produces two main products jointly, A and B, and C, which is a by-product of B. A and B are produced from the same raw material. C is manufactured from the residue of the process creating B.
Costs before separation are apportioned between the two main products by the net realizable value method. The net revenue realized from the sale of C is deducted from the cost of B. Data for April were as follows:
|
Costs before separation |
P200,000 |
|
|
Costs after separation: |
|
|
|
A |
50,000 |
|
|
B |
32,000 |
|
|
C |
4,000 |
|
|
Production for April, in pounds: |
|
|
|
A |
800,000 |
|
|
B |
200,000 |
|
|
C |
20,000 |
|
|
Sales for April: |
|
|
|
A |
640,000 pounds @ P0.4375 |
|
|
B |
180,000 pounds @ 0.65 |
|
|
C |
20,000 pounds @ 0.30 |
|
Determine the gross profit for April.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
