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joint & by products

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Few clarifications

Joint Products: Two or more products of almost equal economic valuesimultaneously produced from same process and RM

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Few clarifications

CO-Products: Two or more products of almost equal economic valuesimultaneously produced from same process and RM

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Few clarifications

Bye Products

Products of relatively small value which are incidentally andunavoidably produced in the course of manufacturing main product

paramjit sharma

Few clarifications

Joint Products: Two or more products of almost equal economic valuesimultaneously produced from same process and RM

Characteristics

Same Raw materialsProduced SimultaneouslyAlmost of Equal economic ValueFurther processing after separation

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Joint Costs Subsequent Costs

Joint Costs

Joint or common costs are those which are incurred before thatstage in manufacture When the product became separated

Subsequent Costs

Subsequent cost or attributable costs are those costs that come after the separation or split off point

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Apportionment For Joint Products

To determine the unit costs of productsTo help in inventory valuationTo determine PL on each line of ProductsTo determine price of each Products

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Apportionment (Methods)

Sales Value MethodsPhysical Units MethodsAverage Unit Cost MethodsSurvey Method

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Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICESON THE BASIS OF SALES VALUEON THE BASIS OF NET VALUE

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Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICES

Joint Costs Rs 9000Products Selling Price App. Cost

(Rs) PU (Rs) Ratio (12:8:4)A 12 4500

B 08 3000

C 04 1500 Joint Costs 9000

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Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF SSALES

Joint Costs Rs 9000Products S Price S Value App. Cost(Rs)

Rs Ratio (24:48:28

A 12 200 2400 2160 B 08 600 4800 4320C 04 700 2800 2520 10,000 9,000

Prod .Qty Rs

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Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF NET VALUE (Reverse Cost Method)

Net value =Sales value- (Est. Profit +S & D Cost +After Split off Processing Cost)

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Apportionment (Methods) Sales Value Methods

ON THE BASIS OF NET VALUE (Reverse Cost Method)

In processing a basic raw materials, three joint productsX Y & Z are produced. The joint expenses of manufacturing areMaterials Rs 10,000,labour Rs 8000,OverheadRs 9000.Subsequent expenses are as follows.

x y z Rs Rs Rs

Materials 2,000 1600 1,800Labour 2,500 1400 1,700Overhead 2,500 1000 1,500

Total 7,000 4,000 5,000Sales Value 42,000 20,000 18,000EST. Profit on sales 5 0% 50% 33.1/2

paramjit sharma

Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF NET VALUE (Reverse Cost Method)

Net value =Sales value- (Est. Profit +S & D Cost +After Split off Processing Cost)

paramjit sharma

Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICESON THE BASIS OF SALES VALUEON THE BASIS OF NET VALUE

paramjit sharma

Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICESON THE BASIS OF SALES VALUEON THE BASIS OF NET VALUE