Physical Units Method Alomar Company manufactures four products from a joint production process: barlon, selene, plicene, and corsol. The joint costs for one batch are as follows: Direct materials Direct labor Overhead At the split-off point, a batch yields 2,076 barlon, 3,632 selene, 2,984 plicene, and 4,280 corsol. All products are sold t the split-off point: barlon sells for $14 per unit, selene sells for $20 per unit, plicene sells for $25 per unit, and corsol sells for $34 per unit. Required: 1. Allocate the joint costs using the physical units method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Note: The total of the allocated cost does not equal to the one provided in the question data due to rounding error. Allocated Joint Cost Barlon Selene Plicene Corsol Total 2. Suppose that the products are weighted as shown below: Barlon Selene Plicene Corsol 2.5 Allocate the joint costs using the weighted average method. If required, round your percentage allocation to four decimal places and round allocated costs to the nearest dollar. Allocated Joint Cost Barlon $69,456 33,935 28,078 1.2 2.2 1.3
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.
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Joint Cost :— It is the total cost that is jointly incurred in the manufacturing of joint products.
These joint products are separated at split off point.
Joint cost is allocated between the products using different allocation methods.
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