MIX Inc. is conducting a joint process which results to three products. The following production data were provided by MIX Inc. for the current period: Product Name Units Produced Selling price per unit at split off point Ace 10,000 P40 Bat 15,000 P20 Can 25,000 P12 Additional data for the period were provided: All the ace items were sold for a gross profit of P100,000. The joint costs were allocated using physical method. Requirement: 1. What is the gross profit/(loss) if all the Bat items are sold in current year? 2. Assuming the joint costs are fixed, what is the joint cost allocated to can items using the relative sales value method?
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.
MIX Inc. is conducting a joint process which results to three products. The following production data were provided by MIX Inc. for the current period:
Product Name Units Produced Selling price per unit at split off point
Ace 10,000 P40
Bat 15,000 P20
Can 25,000 P12
Additional data for the period were provided:
All the ace items were sold for a gross profit of P100,000.
The joint costs were allocated using physical method.
Requirement:
1. What is the gross
2. Assuming the joint costs are fixed, what is the joint cost allocated to can items using the relative sales value method?
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