Question 5

Telsa Limited manufactures two products (AE and XP) through a joint process. Both products can be sold immediately after split-off. There are no opening inventories or work in progress. The following information is available for last period:

Total joint production costs $1,164,240

Product	Production units	Sales units	Selling price per unit
AE	18,000	15,000	$15.00
XP	15,000	12,000	$18.00

Required:

Using the sales value method of apportioning joint production costs,

1. Distinguish between joint products and byproducts and give an example of each. [4 marks]
2. Compute costs that will be allocated to product AE and XP [5 marks]
3. Calculate value of closing inventory for AE and XP [3 marks]