The Bangles Corporation manufactures two products, X and Y in a joint process. The data from the production of the two products is as follows: Direct Materials used 720,000 Direct Labor 300,000 Factory overhead 1,380,000 Production Output Units X 80,000 Y 240,000 Product X sells for 15 per unit and Product Y sells for 20 per unit Required: Compute the following a. Compute the total joint cost to be allocated to X and Y b. compute the joint cost to be allocated to product X using physical unit method c. Compute the joint cost to be allocated to product Y using the relative sales value method
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The Bangles Corporation manufactures two products, X and Y in a joint process. The data from the production of the two products is as follows:
Direct Materials used 720,000
Direct Labor 300,000
Factory overhead 1,380,000
Production Output Units
X 80,000
Y 240,000
Product X sells for 15 per unit and Product Y sells for 20 per unit
Required: Compute the following
a. Compute the total joint cost to be allocated to X and Y
b. compute the joint cost to be allocated to product X using physical unit method
c. Compute the joint cost to be allocated to product Y using the relative sales value method
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