Previtz Company produces two products from a joint process: X and Z. Joint Processing Costs for this production costs for this production cycle are P 8,000 Sales Price Disposal Cost Further Final Sale Per Yard at Per yard at Processing Price per Yards Split off Split Off Per Yard Yard X 1,500 P 6.00 3.50 P 1.00 P 7.50 Y 2,200 9.00 5.00 3.00 11.25 If X and Z are processed further, no disposal costs will be incurred or such cost will be borned by the buyer Requirement Using net realizable value at split-off, what amount of joint processing cost is allocated to Z? Using approximated net realizable value at split off, what amount of joint processing cost is allocated to X? Using approximated net realizable value at split off, what amount of joint processing cost is allocated to Z?
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.
Previtz Company produces two products from a joint process: X and Z. Joint
Processing Costs for this production costs for this production cycle are P 8,000
Sales Price Disposal Cost Further Final Sale
Per Yard at Per yard at Processing Price per
Yards Split off Split Off Per Yard Yard
X 1,500 P 6.00 3.50 P 1.00 P 7.50
Y 2,200 9.00 5.00 3.00 11.25
If X and Z are processed further, no disposal costs will be incurred or such cost will be borned by the buyer
Requirement
- Using net realizable value at split-off, what amount of joint
processing cost is allocated to Z? - Using approximated net realizable value at split off, what amount of joint processing cost is allocated to X?
- Using approximated net realizable value at split off, what amount of joint processing cost is allocated to Z?
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