Joint By Product -Questions PDF

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COST ACCOUNTING

Practice Questions

Question-1 MZ Chemical Industry has been facing the problem of accounting for the cost of by-products since beginning. The following data is available from the cost records of MZ Chemical Industry:

Description

Units

Sales of main product Total production cost

10,000 12,000

Selling & Admin. expenses

Rs. 20,000

Sale of by-products

Rs. 4,800

Rate (Rs.) 10 6

Required: Prepared Income statements separately under the following two methods: a) NRV b) Other Income Question-2 SM Chemical Industry has been facing the problem of accounting for the cost of by-products since beginning. The following data is available from the cost records of SM Chemical Industry:

Description

Units

Sales of main product Total production cost

18,000 21,600

Selling & Admin. expenses

Rs. 36,000

Sale of by-products

Rs. 8,640

Rate (Rs.) 10 6

Required: Prepared Income statements separately under the following two methods: a) NRV b) Other Income Question-3 Red Chemical Ltd. produces three products P, Q, and R. Following are the data available for these three products produced by Red Chemical Ltd. Product P 2,000 kgs sold at Rs. 250 per kg. Product Q 4,000 kgs sold at Rs. 150 per kg. Product R 1,000 kgs sold at Rs. 300 per kg. Total joint cost of producing the above products was Rs. 1,200,000 Required: Apportion the joint costs and calculate profit for each product in the following basis separately: a) The Physical unit basis b) The sale value basis

Prepared by Abdul Samad

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COST ACCOUNTING

Practice Questions

Question-4 Crescent Chemical Ltd. produces three products X, Y, and Z. Following are the data available for these three products produced by Red Chemical Ltd. Product X 3,600 kgs sold at Rs. 250 per kg. Product Y 7,200 kgs sold at Rs. 150 per kg. Product Z 1,800 kgs sold at Rs. 300 per kg. Total joint cost of producing the above products was Rs. 2,160,000 Required: Apportion the joint costs and calculate profit for each product in the following basis separately: a) The Physical unit basis b) The sale value basis Question-5 The joint cost amount of three products produced by Star Chemicals is 600,000. They manufactures three products are A, B and C from joint process. Additional Information is as follows:

Units Produced 6,000 4,000 2,000

Product A B C

Market- Value at spilt-off (Rs.) 400,000 350,000 250,000

Additional Cost & Market Value If Processed Further Additional Market Cost Value 90,000 550,000 70,000 450,000 50,000 300,000

Required: a) Total cost of each product using average unit cost method b) Total cost of each product using market value method Question-6 The joint cost amount of three products produced by MK Chemicals is 1,080,000. They manufactures three products are J, K and L from joint process. Additional Information is as follows:

Product J K L

Units Produced 10,800 7,200 3,600

Market- Value at spilt-off (Rs.) 720,000 630,000 450,000

Additional Cost & Market Value If Processed Further Additional Market Cost Value 162,000 990,000 126,000 810,000 90,000 540,000

Required: a) Total cost of each product using average unit cost method b) Total cost of each product using market value method

Prepared by Abdul Samad

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COST ACCOUNTING

Practice Questions

Question-7 In a Brass Foundary, three types of building accessories, namely A, B and C, are manufactured involving complicated designs. Each type is manufactures from the same mixture of molten brass but requires skilled labour and care in molding each type. Further information given below: Direct Material a) Brass ingots- 200 quintals at Rs. 800 per quintal b) Coke- 50 quintals at Rs. 15 per quintal c) Cupola Labour-20 men at Rs. 5 per day for 1 day d) Depreciation on Melting Furnace Equipments at Rs. 1 per quintal of ingot melted. Molten brass taken out of the cupola is distributed 50% to A. 30% to B and 20% to C. Direct Labour Product A 220 men at 5 per day for 1 day. Product B

250 men at 7 per day for 1 day.

Product C

150 men at 7 per day for 1 day.

Factory Overheads Product A

100% of Direct Labour

Product B

200% of Direct Labour

Product C

300% of Direct Labour

General Factory Overheads 10% of Works Cost

Assume no loss in melting and no rejection in molding Required: Draw up a cost sheet in appropriate form, showing the cost of production per quintal of each type of products. A, B and C with reference to the above data.

Prepared by Abdul Samad

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