18151 650 Department / Total cost (22,000 + 31,500) 253,500 Less cost of closing inventory (work-in-process): Material cost (100 litres x 20) 2,000 Conversion cost (100 x 0.50 x 31,500 + 1,050)] 1,500 3,500 Cost to be allocated between products X and Y 50,000 WORKING NOTES (1) 1,050 are equivalent units: (1,000, completed units + 100 units, work in process x 0.50 complete). (ii) Litres produced, 1,000 Product X (0.80 1,000) - 800 litres Product Y (0.20 X 1,000) - 200 litres Department II (Product X Equivalent units started and finished (800 litres from Department I - 200 litres, closing inventory) 600 Add closing equivalent units inventory (200 x 0.25) 50 Equivalent units produced Conversion costs 52,000 Cost per equivalent unit (52,000 - 650) Statement Apportioning Joint Cost of Department I between Products X and Y (NRV Less Normal Profit Metbod) Product Output Selling price Total market Normal Separable Joint costs (litres) value profit costs 150 41.20,000 $24,000 64,000 32.000 Y 112.50 22,500 4,500 18,000 Normal profit rate = 100 350,000 + (+80 x 800)] = $1.42,500 - 100 80 = 20 per cent Separable costs for completed 800 units & 180 per equivalent unit - (180 x 800) - 64,000. P.14.17 X Ltd is in the food processing industry. In one of its processes, three joint products are manu- factured. Traditionally, the company apportions costs incurred upto the joint products pre-separation point on the basis of weight of output of the product. You are required to prepare statements for the management to express: (a) The profit or loss of each product as ascertained, using weight basis of apportioning pre-separation joint cost (b) The optimal contribution which could be obtained from the manufacture of these products, The following process data for December are given. Costs incurred upto separation point are 596,000. j33 80 800 200 Product C 28,000 Product A Product B Cost incurred after separation point 220,000 12,000 Selling price per tonne: Completed product 500 800 Estimated, if sold at separation point 250 700 Output (tonnes) 100 60 The cost of any unused capacity after the separation point should be ignored. 600 450 80