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Comparative Profit and Loss Statement Analysis

The document outlines a problem involving the allocation of joint costs in manufacturing, specifically for a main product A and two byproducts M1 and M2. It provides financial data including total costs, sales values, estimated profits, and selling expenses, and requires the preparation of a comparative Profit and Loss Statement. The solution includes calculations for the costs and profits associated with each product based on the provided data.

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charleschirwa477
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11 views2 pages

Comparative Profit and Loss Statement Analysis

The document outlines a problem involving the allocation of joint costs in manufacturing, specifically for a main product A and two byproducts M1 and M2. It provides financial data including total costs, sales values, estimated profits, and selling expenses, and requires the preparation of a comparative Profit and Loss Statement. The solution includes calculations for the costs and profits associated with each product based on the provided data.

Uploaded by

charleschirwa477
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Problem 4.

14

Rs. 9,325 8,925

400

In manufacturing the main product A. a company processes the resulting waste material into two
byproducts M, and M2. Using the method of working back from sales value to an estimated cost, you
are required to preparc a comparative Profit and Loss Statement of the three products from the
following data:

(i) Total cost upto separation point was Rs. 1,36,000

Pm('e~'s Cost iI/g. Joint al/d By-products

(ii) Sales (all production) Rs.

(iii) Costs after separatIOn Rs.

(iv) Estimated net profit percentage to sales value

(v) Estimated selling expenses as percentage or sales value

Solution:

3.28,000

20%,

M,

32,(X)()

9,600

20%,

20'X,

4.35

48,CXlO

14,400

30%

20%
(B COlli Adapted)

Statement of Apportioml1('nt of Joint Cost

Sales. Vallie Less' Estimated Net Profit: M, (20% ofsalcs valllc) M2 (30% of sales value)

Total Cost of Sales

[Link] . . Estimated seiling expenses (20% of sales value)

Less: Cost after separatIOn

Total cost upto separation

Total eost upto separation point Lcs.I Cost upto separation point as shown above:

By-Product M, Rs. 9.600 By-Product M2 Rs. 9,600

Cost up to separation for Main Pro'duct A

M,

32.000

0,400

25.600 0,40() 19,200 9,600

9,60()

III ·-Product.1

AI.

14,400

33,600

9.600 24.000 14,400

9,600

Rs. 1,30,000

19,200

Rs. 1,16,SOO

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