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Cost Analysis of Chemical X Production

The document outlines the costing data for a factory producing chemical X and its byproduct Y for January. It details the joint and separate expenses, sales value of Y, and the calculation of the cost per tonne for both products. The final cost per tonne for chemical X is determined to be Rs. 338 after accounting for the share of joint costs attributed to byproduct Y.

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22 views1 page

Cost Analysis of Chemical X Production

The document outlines the costing data for a factory producing chemical X and its byproduct Y for January. It details the joint and separate expenses, sales value of Y, and the calculation of the cost per tonne for both products. The final cost per tonne for chemical X is determined to be Rs. 338 after accounting for the share of joint costs attributed to byproduct Y.

Uploaded by

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

Problem 4.

17 A factory is engaged in the production of a chemIcal X and in the course of its


manufacture, a byproduct Y is produced, which after a separate process has a commercial value. For the
month of January, the following are the summarised costing data: Joint Expenses Sepli/'(/te Expenses

X Y Rs. Rs. Rs. Materials 19,200 7,360 780 Labour 11,700 7,680 2,642 Oncost 3,450 1.550 544 The output
for the month was 142 tonnes of X and 49 tonnes of Ythe selling price of Yaveraged Rs. 280 per tOlUle.
Assuming that the profit on Y is estimated at 50{y<' of the sellmg pnce, prepare an account showing the
cost of X per tonne. (B. lOIll. BlllIrthi{//; Kama/aka)

Solution:

Calculation of the Share of }' in Joint ('ost

Sales value of Y By-product (49 tons @ Rs. 280 per ton) Less,' Profit (50% of sales value) Total cost of By-
product Y Less,' Subsequent cost (Material + Labour + Oncost)

Share of Y In jOint cost

Main Product X Account

Rs. Rs. To Materials: By Y By-product Ale Joint 19,200 By Cost of Product (B.F.) Separate 7,360 26,5GO
Cost per ton --To Labour: 47,990 + 142 = Rs. 338 JOint 11,700 Separate 7,680 19,380 ---To Oncost: Joint
3,450 Separate 1,500 4,950 --50,890

By-Product Y Account

Rs. To X Chemical Ale By Cost of Production (Portion of JOint expenses) 2,894 Cost per ton To Materials
780 = 6,860 + 49 To Labour 2,642 = Rs. 140 To Oncost 544

6,860

Rs. 13,720 6,860 6,860 3,960 2,894

Rs. 2,894 47,990

50,890

Rs. 6,860

6,860

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