A company produces a main chemical product M and in the process a by-product “B” is also produced. The costs up to the point of separation are Rs. 1,20,000.

The separate additional costs incurred after separation are Rs. 33,000 and Rs. 3,000, respectively. The quantities emerging at the separation point are 1,50,000 kg and 30,000 kg, respectively. All the production is sold at the following prices:

M at Rs. 1.96 per kg B at Re 0.20 per kg.

Selling and distribution overheads applicable to the above quantities are Rs. 1,900 and Rs. 365, respectively.

Prepare a statement of profi t or loss for both “M” and

“B” on each of the following basis:

(a) Value of B nil at separation point

(b) Apportion costs up to separation on quantity basis

(c) Apportion costs up to separation on the basis of sales