Advanced Cost Management Accounting Costing of Joint Product

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Advanced Cost & Management Accounting Costing of Joint Product & By Product

Advanced Cost & Management Accounting Costing of Joint Product & By Product

Input Output Joint Product Considerable Significance Example: Crude Oil (Diesel & Petrol) Output By

Input Output Joint Product Considerable Significance Example: Crude Oil (Diesel & Petrol) Output By Product Incidental Produce Example: Sugarcane Juice (Husk or Pulp is a by product)

Process Accounting Department A (Cost Accumulated) Direct Material, Direct Labor, FOH Joint Product A(a)

Process Accounting Department A (Cost Accumulated) Direct Material, Direct Labor, FOH Joint Product A(a) A(b) A(c) Direct Material Direct Labor FOH By Product Requiring no further process By Product Requiring further process

Bases of Cost Allocation Physical Quantity Ratio Selling Price Ratio Hypothetical Market Value Ratio

Bases of Cost Allocation Physical Quantity Ratio Selling Price Ratio Hypothetical Market Value Ratio

Example Physical quantity method Cost Allocation at Split Off Point 1960 liter fresh milk

Example Physical quantity method Cost Allocation at Split Off Point 1960 liter fresh milk put in the process Skim Milk 1, 000 Liter Cream 500 Liter Butter 200 Liter Ghee 100 Liter Yogurt 60 Liter Miscellaneous 100 Liter 1960 Cost incurred on 1960 liter milk is Rs 15, 680

Solution Skim Milk Cream Butter Ghee Yogurt Miscellaneous = = = 15, 680 15,

Solution Skim Milk Cream Butter Ghee Yogurt Miscellaneous = = = 15, 680 15, 680 / / / 1960 1960 x x x 1000 = 8, 000 500 = 4, 000 200 = 1, 600 100 = 800 60 = 480 100 = 800

Example Cost incurred in the department Rs 70, 000 Drum stick Breast pieces Wings

Example Cost incurred in the department Rs 70, 000 Drum stick Breast pieces Wings Miscellaneous Rs. Rs. 4 6 3 2 per per gram

Example Drum stick Breast pieces Wings Miscellaneous 20, 000 X 4 = 80, 000

Example Drum stick Breast pieces Wings Miscellaneous 20, 000 X 4 = 80, 000 10, 000 X 6 = 60, 000 6, 000 X 3 = 18, 000 4, 000 X 2 = 8, 000 1, 66, 000

Solution Drum stick Breast pieces Wings Miscellaneous = = 70, 000 / / 1,

Solution Drum stick Breast pieces Wings Miscellaneous = = 70, 000 / / 1, 66, 000 x x 80, 000 60, 000 18, 000 = 33, 735 = 25, 300 = 7, 590 = 3, 375 70, 000

Physical Quantity Ratio Total quantity produced 4, 000 grams Drum stick 20, 000 Breast

Physical Quantity Ratio Total quantity produced 4, 000 grams Drum stick 20, 000 Breast pieces 10, 000 Wings 6, 000 Miscellaneous 4, 000 40, 000 Drum stick Breast pieces Wings Miscellaneous = 70, 000 / 40, 000 x 20, 000 = 35, 000 = 70, 000 / 40, 000 x 10, 000 = 17, 500 = 70, 000 / 40, 000 x 6000 = 10, 500 = 70, 000 / 40, 000 x 4000 = 7, 000 70, 000

Miscellaneous Sales = 2 x 4000 = 8, 000 Less Cost 7, 000 1,

Miscellaneous Sales = 2 x 4000 = 8, 000 Less Cost 7, 000 1, 000 Sales = 2 x 4000 = 8, 000 Less Cost 3, 375 4, 625

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