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Production
Total joint processing costs
Joint processing costs per unit
Closing inventories
Cost Allocated to a Joint Product
Cost of closing inventory
b. Determine the
Sales(units)
Selling price per unit
Final sales value
Additional processing costs
Separable cost
Inventories costs
Joint costs
Product
Chocolate
Double-Coffee
Total
Chocolate
Double-Coffee
Double-Coffee
Additional cost
Double-Coffee
Current selling price
Current gross profit
Assignmet Question 3:
a. Deternine the cost of the ending inventories of each of the products as at 1 Oct
Chocolate
$ 1,500,000.00
$ 15,500,000.
15500000/ 27500000=0.56
$ 400,000.00
15500000*1500000/2750000=8454545.45
400000*0.56=224000
110000000-6000000=104000000
$ 15,500,000.
15500000*(104000000/SUM(104000000,65400000))=9575938.55
0.56*1500000=840000
SUM(9575938.55,840000)=10415938.55
10415938.55/1100000=9.47
$ 400,000.00
400000*9.47=3788000
c. Determine the cost of the ending inventories of each of the products as at 1 October 20
Expected final sales value
$ 110,000,000.00
$ 68,400,000.00
110000000+68400000=178400000
$ 15,500,000.00
100+76=176
178400000-15500000-176=162899824
162899824/178400000*100= =91%
Sales Value
$ 110,000,000.00
$ 68,400,000.00
110000000+68400000=178400000
Physical method
$ 1,100,000.00
$ 76.00
76-1100000=(1099924)
of the ending inventories of each of the products as at 1 October 2016 using the physical method
Double-Coffee
$ 1,250,000.00
15,500,000.00
000/ 27500000=0.56
$ 350,000.00
15500000*1250000/2750000=7045454.55
350000*0.56=196000
b. Determine the cost of the ending inventories of each of the products as at 1 October 2016 using the net realisable value
Double-Coffee
$ 900,000.00
$ 76.00
900000*76=68400000
$ 3,000,000.00
68400000-3000000=65400000
15,500,000.00
15500000*(65400000/SUM(104000000,65400000))=5984061.39
0.56*1250000=700000
SUM(5984061.39,700000)=6684061.39
10415938.55/900000=11.57
$ 350,000.00
11.57*350000=4049500
ending inventories of each of the products as at 1 October 2016 using the Constant gross margin method
Gross Margin
110000000*91%=100100000
68400000*91%=62244000
100100000+62244000=162344000
Closing inventories
$ 400,000.00
$ 350,000.00
h of the products as at 1 October 2016 using the net realisable value method
Production
Sales(units)
Closing inventories
Selling price per unit
$ 1,500,000.00
$ 1,100,000.00
$ 400,000.00
$ 100.00
$ 100.00
Separable costs
$ 840,000.00
$ 700,000.00
840000+700000=1540000
$ 1,250,000.00
$ 900,000.00
$ 350,000.00
$ 76.00
$ 76.00