# Costs and Joint Cost Allocation

1 ‘produced as/ sold as’ matrix

Sold as| Produced as|

| | 401| 402| 403| 404| 405| Total|

| 401| 90,000| 10,000| | | | 100,000|

| 402| | 110,000| 30,000| | | 140,000|

| 403| | | 60,000| 40,000| | 100,000|

| 404| | | | 20,000| 20,000| 40,000|

| 405| | | | | 20,000| 20,000|

| Total| 90,000| 120,000| 90,000| 60,000| 40,000| 400,000|

2

Physical Measures Method

| Produced| Proportion| Joint Cost Allocation| Unit Cost| 401| 90,000| (90,000/400,000)0.225 or 22.5%| (200,000 x 0.225)45,000| (45,000/90,000)0.5| 402| 120,000| (120,000/400,000)0.3 or 30%| (200,000 x 0.3)60,000| (60,000/120,000)0.5| 403| 90,000| (90,000/400,000)0.225 or 22.5%| (200,000 x 0.225)45,000| (45,000/90,000)0.5| 404| 60,000| (60,000/400,000)0.15 or 15%| (200,000 x 0.15)30,000| (30,000/60,000)0.5| 405| 40,000| (40,000/400,000)0.1 or 10 %| (200,000 x 0.1)20,000| (20,000/40,000)0.5| | 400,000| 1 or 100%| 200,000| |

| 401| 402| 403| 404| 405|

Revenue| 40,000| 84,000| 70,000| 32,000| 20,000|

Costs| 50,000| 70,000| 50,000| 20,000| 10,000|

Profit| (10,000)| 14,000| 20,000| 12,000| 10,000|

GM%| -0.25| 0.17| 0.29| 0.38| 0.5|

Relative Sales Measure

| Sales Value| Proportion| Joint Cost Allocation| Cost/unit| 401| 36,000| (36,000/259,000)0.139 or 13.9%| (200,000 x 0.139)27,800| (27,800/90,000)0.31| 402| 72,000| (72,000/259,000)0.278 or 27.7%| (200,000 x 0.278)55,600| (55,600/120,000)0.46| 403| 63,000| (63,000/259,000)0.2432 or 24.32%| (200,000 x 0.2432) 48,640| (48,640/90,000)0.54| 404| 48,000| (48,000/259,000)0.1853 or 18.53%| (200,000 x 0.1853) 37,060| (37,060/60,000)0.62| 405| 40,000| (40,000/259,000)0.1544 or 15.44%| (200,000x0.1544)30,880| (30,880/40,000)0.77| | 259,000| 1 or 100%| 200,000| 2.7|

(this is assuming that we sold everything we made as what we made them as)

| Sales Value| Proportion| Joint Cost Allocation | Cost/Unit| 401| 40,000| (40,000/246,000)0.162 or 16.2%| (200,000 x 0.162)32,400| (32,400/90,000)0.36| 402| 84,000| (84,000/246,000)0.341 or 34.1%| (200,000 x 0.341)68,200| (68,200/120,000)0.57| 403| 70,000| (70,000/246,000)0.285 or 28.5%| (200,000 x 0.285)57,000| (57,000/90,000)0.63| 404| 32,000| (32,000/246,000)0.130 or 13%| (200,000 x 0.13)26,000| (26,000/60,000)0.43| 405| 20,000| (20,000/246,000)0.081 or 8.1%| (200,000 x 0.081)16,200| (16,200/40,000)0.41| | 246,000| | 200,000| 2.4|

(Using the sales value of how many of each we sold instead of how many we produced) in cost/unit the units is the amount produced not the amount sold

| Sales Value| Proportion| Joint Cost Allocation | Cost/Unit| 401| 40,000| (40,000/246,000)0.162 or 16.2%| (200,000 x 0.162)32,400| (32,400/100,000)0.324| 402| 84,000| (84,000/246,000)0.341 or 34.1%| (200,000 x 0.341)68,200| (68,200/140,000)0.487| 403| 70,000| (70,000/246,000)0.285 or 28.5%| (200,000 x 0.285)57,000| (57,000/100,000)0.57| 404| 32,000| (32,000/246,000)0.130 or 13%| (200,000 x 0.13)26,000| (26,000/40,000)0.65| 405| 20,000| (20,000/246,000)0.081 or 8.1%| (200,000 x 0.081)16,200| (16,200/20,000)0.81| | 246,000| | 200,000| |

| 401| 402| 403| 404| 405|

Revenue| 40,000| 84,000| 70,000| 32,000| 20,000|

Costs| 32,400| 68,200| 57,000| 26,000| 16,200|

Profit| 7,600| 15,800| 13,000| 6,000| 3,800|

GM%| 0.19| 0.19| 0.19| 0.19| 0.19|

| produced| proportion| cost allocation| cost/unit|

401| 90,000| 0.18| 36000| 0.4|

402| 120,000| 0.24| 48000| 0.4|

403| 90,000| 0.18| 36000| 0.4|

404| 60,000| 0.12| 24000| 0.4|

405| 40,000| 0.08| 16000| 0.4|

seconds| 100,000| 0.2| 40000| 0.4|

| 500,000| | 200,000| |

| 401| 402| 403| 404| 405| seconds|

revenue| 40,000| 84,000| 70,000| 32,000| 20,000| 15,000| costs|...

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