Tutorial 2 Question 1 (14 Marks – 25 Minutes) Supp 2013 Nov Dischem CC manufactures three...

4.1 Ratings (518 Votes)

Req 1.
Allocation of Joint cost under Physical Measures:
Total Joint cost:
Direct Material			224400
Direct Labouor			93500
Manufacturing Overheads			149600
Total Joint cost:			467500

Units produced:
Product A		20000
Product B		25000
Product C		10000
Total Units		55000

Allocation of Joint cost:
Share of Product A (467500/55000*20000):				170000
Share of Product B (467500/55000*25000):				212500
Share f Product C (467500/55000*10000):				85000
Total Joint Cost				467500

Req b:
Allocation on the basis of Net realisable value

Product	Selling price	Units	Total	Further	Total Further	Net realisable	% of Net	Joint cost	Allocation of
	after further		Sales price	Processing cost per unit	Proc. Cost	Value	Realisable value		Joint cost
A	18	20000	360000	2.5	50000	310000	43.36%	467500	202692.3
B	12	25000	300000	3	75000	225000	31.47%	467500	147115.4
C	22	10000	220000	4	40000	180000	25.17%	467500	117692.3
				TOTAL	165000	715000			467500

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