Khemikhale Ltd produces chemicals RFV and NJU during a joint production process. A by-product namely AAA, is also produced during this process. The following costs are incurred during the joint production process before the split-off point: Cost Raw materials Labour cost Manufacturing overhead cost Non-manufacturing overhead cost R R2 000 000 R1 300 000 R3 500 000 R700 000 In addition, the following information is provided • There was no opening or closing inventory of any kind. Product RFV is sold directly after split-off. • Product NJU requires further processing into product NJL at a cost of R120 000 before it is in a sellable condition. No increase or decrease in volume occurs during this further processing. • The total output for Product AAA was sold for R50 000 and the related selling cost was R10 000. • 450 000 litres of product RFV, 300 000 litres of product NJL and 50 000 litres of product AAA were produced. • Joint costs are allocated to joint products using the physical measure method. For this question only assume that the total joint cost to be allocated to joint products is R7 200 000. The production cost per litre of product NJL is: Select one: a. R10,00 b. None of the options c. R9,40 d. R9,00 e. R9,60
Khemikhale Ltd produces chemicals RFV and NJU during a joint production process. A by-product namely AAA, is also produced during this process. The following costs are incurred during the joint production process before the split-off point: Cost Raw materials Labour cost Manufacturing overhead cost Non-manufacturing overhead cost R R2 000 000 R1 300 000 R3 500 000 R700 000 In addition, the following information is provided • There was no opening or closing inventory of any kind. Product RFV is sold directly after split-off. • Product NJU requires further processing into product NJL at a cost of R120 000 before it is in a sellable condition. No increase or decrease in volume occurs during this further processing. • The total output for Product AAA was sold for R50 000 and the related selling cost was R10 000. • 450 000 litres of product RFV, 300 000 litres of product NJL and 50 000 litres of product AAA were produced. • Joint costs are allocated to joint products using the physical measure method. For this question only assume that the total joint cost to be allocated to joint products is R7 200 000. The production cost per litre of product NJL is: Select one: a. R10,00 b. None of the options c. R9,40 d. R9,00 e. R9,60
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Khemikhale Ltd produces chemicals RFV and NJU during a joint production process. A by-product
namely AAA, is also produced during this process.
The following costs are incurred during the joint production process before the split-off point:
Cost
Raw materials
Labour cost
Manufacturing overhead cost
Non-manufacturing overhead cost
R
R2 000 000
R1 300 000
R3 500 000
R700 000
In addition, the following information is provided
• There was no opening or closing inventory of any kind.
•
Product RFV is sold directly after split-off.
.
Product NJU requires further processing into product NJL at a cost of R120 000 before it is in a
sellable condition. No increase or decrease in volume occurs during this further processing.
• The total output for Product AAA was sold for R50 000 and the related selling cost was R10 000.
• 450 000 litres of product RFV, 300 000 litres of product NJL and 50 000 litres of product AAA
were produced.
⚫ Joint costs are allocated to joint products using the physical measure method.
For this question only assume that the total joint cost to be allocated to joint products is
R7 200 000.
The production cost per litre of product NJL is:
Select one:
a.
R10,00
b.
None of the options
C.
R9,40
d. R9,00
e. R9,60
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