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. The total joint cost to be allocated to joint products is Select one: a. R6 760 000 b. None of the options ○ c. R7 500 000 d. R6 800 000 e. R6 845 000
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. The total joint cost to be allocated to joint products is Select one: a. R6 760 000 b. None of the options ○ c. R7 500 000 d. R6 800 000 e. R6 845 000
Chapter1: Financial Statements And Business Decisions
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