HASF Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative sales value at the end of the joint process. Additional information for HASF are as follows: A B C Total Units produced 12000 8000 4,000 24,000 Joint costs 144000 60,000 36,000 240,000 Sales value before additional processing 240000 100,000 60,000 400,000 Additional costs for further processing 28000 20,000 12,000 60,000 Sales value if processed further 280000 120,000 70,000 470,000 Required: Which, if any, of products A, B, and C should be processed further and then sold? Keeping in view the answer of "part a", write down your critical feedback to support your answer
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.
HASF Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative sales value at the end of the joint process. Additional information for HASF are as follows:
| A | B | C | Total | |
| Units produced | 12000 | 8000 | 4,000 | 24,000 |
| Joint costs | 144000 | 60,000 | 36,000 | 240,000 |
| Sales value before additional processing | 240000 | 100,000 | 60,000 | 400,000 |
| Additional costs for further processing | 28000 | 20,000 | 12,000 | 60,000 |
| Sales value if processed further | 280000 | 120,000 | 70,000 | 470,000 |
Required:
- Which, if any, of products A, B, and C should be processed further and then sold?
- Keeping in view the answer of "part a", write down your critical feedback to support your answer
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