A factory producing an article A also produces a by-product B, which is further processed into finished product. The joint cost of manufacture is given as follows:

Material 50,000 Labour 30,000 Overheads 20,000 Subsequent costs are given as follows:

A B

(Rs) (Rs)

Material 30,000 15,000 Labour 14,000 10,000 Overheads 6,000 5,000 50,000 30,000 Selling prices 1,60,000 80,000 Estimated profits on sales are 25% for A and 290% for B. It is assumed that selling and distribution expenses are in proportion to sales prices. Show how you would apportion joint costs of manufacture and prepare a statement showing the cost of production of A and B.