The following questions relate to Kyle Company, which manufactures products KA, KB, and KC from a joint process. Joint product costs were $193,000. Additional information follows. If Processed Further Sales value at Product Units Produced Split-off $280, 000 250, 000 190, 000 Sales Values Additional costs KA 88, 000 $370, 000 $58, 000 64, 000 28, 000 KB 310, 000 280, 000 46, 000 KC 34,000 After the publication of recent scientific test results, the government has banned the sale of product KC. IF KC is produced, it must be disposed of in an approved way that costs $247,800 for every 28,000 units produced. Required: a. Assuming that Kyle Company continues to use the physical quantities method of allocation, what joint costs will be allocated to KA and to KB, respectively? b. Which, if either, product would you recommend Kyle Company sell at split-off?
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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