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- 1 Marks
Question
RSTU manufactures two products called S and T with a joint cost of N3,550,000. Normal process loss is 5% of expected output with scrap value of N50,000 and joint costs are apportioned based on sales value. Other data available are as follows:
Product S: 11,520 units, selling price N250
Product T: 9,750 units, selling price N320
The profit on product T is:
A. N1,515,628
B. N1,492,708
C. N1,416,000
D. N1,300,000
E. N1,274,000
Answer
Answer: D. N1,300,000
Explanation: The profit is calculated by first determining the proportion of joint costs allocated to product T based on its sales value relative to total sales. After allocating the joint costs, the difference between the sales revenue of product T and its allocated joint costs gives the profit. The calculation also considers the impact of the normal process loss and scrap value.
- Tags: apportionment, Joint Costs, Process Costing, Profit Calculation
- Level: Level 1
- Topic: Costing Techniques
- Series: MAY 2024
- Uploader: Dotse