Question
Golden Ltd is company that makes 2 primary products Rose Gold (RD) and Yellow Gold (YG) and 1 secondary product Burnt Gold (BG) from a
Golden Ltd is company that makes 2 primary products Rose Gold (RD) and Yellow Gold (YG) and 1 secondary product Burnt Gold (BG) from a production process. The following costs are incurred in the production process.
| N$ |
Materials | 250,000 |
Direct Labour | 100,000 |
Variable overheard | 60,000 |
Fixed overheads | 90,000 |
Total | 500,000 |
The company uses the net-realizable value to allocate common costs. For the year ended 31st December 2020, the company did not have opening inventory for any of the products. The following information relate to the 3 products for the financial year ended 31st December 2020:
Product | RG | YG | BG |
Selling price at split-off point / kg | 15 | 25 | 5 |
Selling price after split-off point/ kg | 20 | 30 | 7 |
Cost after split-off point | 105,000 | 145,000 | 60,000 |
Output in kgs | 40,000 | 30,000 | 20,000 |
Required: Calculate the total amount to be credited as other income if all products are processed further.
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