Intermediate: Preparation of process accounts and apportionment of joint costs Three joint products are produced by passing chemicals through two consecutive processes. Output from the first process is transferred into the second process, from which the three joint products are produced and immediately sold.

The previous month's operating data for the processes is tabulated below:

There were no opening or closing stocks in either process and the selling prices of the output from process 2 were:

Required:

(a) Prepare an account for process 1. together with any loss or gain accounts you consider necessary to record the month's activities. (8 marks)

(b) Calculate the profit attributable to each of the joint products by apportioning the total costs from Process 2:
(i) according to weight of output {ii) by the market value of production. (6 marks)

(c) Critically examine the purpose of apportioning process costs to joint products

Transcribed Image Text:

Direct material () (25 000 kg at Process 1 100 000 Process 2 4 per kg) Direct labour () Overheads () 62500 45000 69 000 69 000 Normal loss 10 Nil (% of input)