Exercise $1$

UMET uses the sales value method at the separation point to account for the production of its three different products: A$,$ B and C$.$ The products are considered joints in the first department $($Department $1),$ where the products are separated at end of processing. Product A requires no further processing after the separation point, while products B and C are sent to departments $3$ and $4$ respectively for further processing.

Information on costs and income:

Products

Units

Produced

Market value per unit

at the end of the process

TO

$75,000$

S$/$ $$25$

b

$70,000$

S$/$ $$20$

c

$89,000$

S$/$ $$30$

Department

Department cost per unit

$1$

S$/$ $$15$

$2$

S$/$ $$8$

$3$

S$/$ $$6$

Using the split$-$point sales value method:

$1.-$ Determine the value of the joint costs

$2.-$ Determine the cost of additional processing

$3.-$ Determine the allocation of joint costs to each product