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joint & by products

paramjit
Few clarifications

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

paramjit
Few clarifications
CO-Products:
Two or more products of almost equal economic
value
simultaneously produced from same process and RM

paramjit
Few clarifications

Bye Products

Products of relatively small value which are incidentally and


unavoidably produced in the course of manufacturing main
product

paramjit
Few clarifications
Joint Products:
Two or more products of almost equal economic
value
simultaneously produced from same process and RM

Characteristics

Same Raw materials


Produced Simultaneously
Almost of Equal economic Value
Further processing after separation

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Joint Costs Subsequent Costs

Joint Costs

Joint or common costs are those which are incurred before that
stage 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 products


To help in inventory valuation
To determine PL on each line of Products
To determine price of each Products

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Apportionment (Methods)

Sales Value Methods


Physical Units Methods
Average Unit Cost Methods
Survey Method

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Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICES


ON THE BASIS OF SALES VALUE
ON THE BASIS OF NET VALUE

paramjit
Apportionment (Methods)

Sales Value Methods


ON THE BASIS OF UNIT PRICES

Joint Costs Rs
9000Selling Price
Products App. Cost
(Rs)
A PU
12 (Rs) Ratio4500
(12:8:4)
B 08 3000

C 04 1500

Joint Costs 9000


paramjit
Apportionment (Methods)

Sales Value Methods


ON THE BASIS OF SSALES

Joint Costs Rs
Products S Price 9000
Prod .Qty S Value App. Cost(Rs)
Rs Rs Ratio (24:48:28

A 12 200 2400 2160

B 08 600 4800 4320


C 04 700 2800 2520

10,000 9,000

paramjit
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
Apportionment (Methods) Sales Value Methods

ON THE BASIS OF NET VALUE (Reverse Cost Method)

In processing a basic raw materials, three joint products


X Y & Z are produced. The joint expenses of manufacturing are
Materials Rs 10,000,labour Rs 8000,OverheadRs 9000.
Subsequent expenses are as follows.

x y z
Rs Rs Rs

Materials 2,000 1600 1,800


Labour 2,500 1400 1,700
Overhead 2,500 1000 1,500

Total 7,000 4,000 5,000


Sales Value 42,000 20,000 18,000
EST. Profit on sales 5 0% 50% 33.1/2
paramjit
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
Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICES


ON THE BASIS OF SALES VALUE
ON THE BASIS OF NET VALUE

paramjit
Apportionment (Methods)

Sales Value Methods

ON THE BASIS OF UNIT PRICES


ON THE BASIS OF SALES VALUE
ON THE BASIS OF NET VALUE

paramjit