LMN Compagny produces three products K, L and M. During the year, the joint costs

of processing the three products were $480,000.

Production and sales value information were as follows:

Sales Value

Product Units at Split-Off Separable Costs Selling Price

K 500,000 $13 per unit $6.00 per unit $40 per unit

L 300,000 $12 per unit $4.00 per unit $37 per unit

M 200,000 $8 per unit $3.00 per unit $28 per unit

Allocate the joint costs using the physical output method.

(Week 11: Chapter 9, Joint product and by Product costing)