Intermediate: Accounting for joint and by¬ products and preparation process accounts

(a) Distinguish between the cost accounting treat¬ ment of joint products and of by-products.

(3 marks)

(b) A company operates a manufacturing process which produces joint products A and B and by-product C.

Manufacturing costs for a period total £272 926, incurred in the manufacture of:

Product A 16000 kg (selling price £6.10/kg) Product B 53 200 kg (selling price £7.50/kg) Product C 2770 kg (selling price £0.80/kg)

Required:

Calculate the cost per kg (to three decimal places of a pound £) of products A and B in the period, using market values to apportion joint costs.

(5 marks)

(c) In another of the company’s processes, product X is manufactured using raw mater¬ ials P and T, which are mixed in the propor¬ tions 1:2.

Normal weight loss 5% is expected during the process.
In the period just ended 9130 kg of Product X were manufactured from 9660 kg of raw materials. Conversion costs in the period were £23 796. There was no work in progress at the beginning or end of the period.
Required:
Prepare the product X process account for the period.

Transcribed Image Text:

Material purchase prices are: P 5.00 per kg T 1.60 per kg