Data

Separable
Total sales cost of
Split-off Units Units joint Sales value at value at split- processing Selling
products produced Split-off ratio product split-off off per unit price
X 40,000 1 40,000 €5.00 €200,000 €4.00 €10.00
Y 20,000 0.5 10,000 €6.00 €120,000 €3.50 €12.00
Z 60,000 0.75 45,000 €7.00 €420,000 €3.00 €8.00
Total 120,000 95,000 740,000

Joint costs
Fixed €120,000 €120,000
Variable €4.00 €380,000
Total: €500,000
Gross margin: 19%

Allocation methods
Net-
Units Gross sales Relative sales realizable
produced Joint units value Gross margin value value
X 33% 42% 36% €165,000 27% 34%
Y 17% 11% 21% €125,000 16% 24%
Z 50% 47% 43% €210,000 57% 42%
Check: 100% 100% 100% €500,000 100% 100%

Profitability report
Method: Net-realizable value
Sales Separable Allocated joint
Revenue costs costs Total profit Unit profit Profitability
X €400,000 €160,000 €169,014 €70,986 €1.77 18%
Y €240,000 €70,000 €119,718 €50,282 €2.51 21%
Z €480,000 €180,000 €211,268 €88,732 €1.48 18%
Total: €1,120,000 €410,000 €500,000 €210,000
 Total Net-
separable Total sales realizable
costs value value
€160,000 €400,000 €240,000
€70,000 €240,000 €170,000
€180,000 €480,000 €300,000
410,000 1,120,000 710,000
Units produced
Joint units
Gross sales value
Gross margin
Relative sales value
Net-realizable value