Berger Paint Pakistan limited produces three types of joint products, Silver paint, Golden paint and Diamond paint.

During March, 2020, the following information was recorded:

Particulars

Silver Paint

Golden Paint

Diamond Paint

Total Costs

Joint materials costs

-

-

-

Rs 960,000

Joint direct costs

555,000

Joint factory costs

490,000

Separable costs

Rs 150,000

Rs 170,000

Rs 190,000

550,000

Production units

2,100 liters

2,500 liters

2,800 liters

7,400 liters

Sales units

1,900 liters

2,200 liters

2,400 liters

6,500 liters

Selling price per liter

Rs 375

Rs 490

Rs 580

-

Additional information:

There was no beginning inventory as on 01/03/2020.

Required:

i). Compute total cost and unit cost of each type of above product, using the Hypothetical market value method.

ii). Compute closing inventory cost of each product and total inventory costs as on 31/03/2020.

iii). Define joint products and by-products. Also give logical justification to treat any one of joint products as a By-product.