Joints (Pty) Ltd manufactures three products, namely P1, Q2 and R3, in a joint process. These products are extensively used in the mining industry. The joint costs relating to this process for the last month was R119000. Details of the three products are as follows: Output quantity in litresSelling price at split off per litreFurther processing costs per litreFinal selling price per litreP12200R11R5R22Q24500R15R3R21R33000R16N/AR16Assuming that joint costs are allocated based on the net realisable value method, calculate the total cost per unit for product P1. a.R12.16b.R17.16c.R13.71d.R18.71e.R17.27

Joint costs are costs that are incurred jointly on two or more than two products. These costs needs…

Answered: Joints (Pty) Ltd manufactures three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Joints (Pty) Ltd manufactures three products, namely P1, Q2 and R3, in a joint process. These products are extensively used in the mining industry. The joint costs relating to this process for the last month was R119000. Details of the three products are as follows:

	Output quantity in litres	Selling price at split off per litre	Further processing costs per litre	Final selling price per litre
P1	2200	R11	R5	R22
Q2	4500	R15	R3	R21
R3	3000	R16	N/A	R16

Assuming that joint costs are allocated based on the net realisable value method, calculate the total cost per unit for product P1.

R12.16

R17.16

R13.71

R18.71

R17.27

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